I went from $1/day to billionaire in 10 years... here's how

0:00 It seems like it was an insane decision to go to China with no money, no plan, no relationships, no language skills, slept in a bush, and literally build your own factory. It was a disaster. When I say we were naive, I feel like that is even an understatement. To be fair, success is a bad teacher. And in our business now, I'm a huge believer in firing bullets and failing fast. And then if the bullet works, it's a cannonball and we invest and we build the recipe around that. How big is the the empire today? A little over two to a billion US in in revenue. And it's public or it's not a not a public company? Are you ready, are you ready, are you ready? Let's go!

0:36 I feel like I can rule the world, I know I could be what I want to Here's what's fascinating to me. So I I have like A love language when it comes to business and my love language is Self made. Dropped out of college.

0:55 Family business. Multi billion dollar company. With no outside capital. Like you hit all of the b things on my little bingo card there, which is what got me interested. I wanna start with the or the origin story. So here's the bullet points. Grew up on a dairy farm.

1:10 Um started selling door to door hot air balloons. Was in law school then quit because he didn't like walking up a big hill every day. And then made a crazy rash decision, moved to China with no money, no plan, no relationships, no language skills, slept in a bush, somehow turned that into a billion dollar company. So That's the s that's the the bullet points. Can you unpack that a little bit? That's quite accurate.

1:33 That's quite a good way to summarise it quite quickly. If I was to frame up L Probably first ten years is that famous saying that success is going from Failure to failure with no loss of enthusiasm. I think that actually really does sum us up.

1:50 Grow up. More or less on a farm and then we moved north for our schooling. And my brother won the New Zealand Science Fair with a model hot air bloom and then We decided or he decided, he was twelve. that we should make these kit set balloons and sell them door to door on the festivals when we're at school and and I'm slightly younger than him, so he kinda hired me as the

2:12 When I say high, I was the free labor to help make the hot ear balloons. And yeah, we used to make these model for the ear balloons and and sell them door to door. I used to when I was quite young, get my friends together and backpack around New Zealand and south door to door. And I can tell you that Learning how to sell door to door is a great life lesson because you never know who's behind that door. And you never know what response you're getting.

2:34 And on top of that, selling a flying, burning plastic bag is particularly hard to sell, so it really hones your skills. What was the uh what was your technique? So knock knock. Oh yeah, I used to be like we're just a small company trying to get off the ground. Wink wink, like no pun intended. We were young kids, so that always helps. And uh you know, we'd often like we'd sort of build thesis around which neighborhoods were more likely to buy.

3:00 It was usually not the the richest neighborhoods. They were all Maybe a little too smart. And so it was sort of somewhere in between would always w. You know, signs of children in the back yards. Um, of houses. And I always remember that one of my good friends

3:14 Still one of my very good friends today. Fraser. He used to always outsell me. I don't think there's a day where I outsold him. And I always thought I was a much better salesperson than him when the door opened. But he

3:29 Just did not care about being rejected. He'd go from each house, he'd get yelled and shouted at and sweared at, and he'd come out laughing, and he'd be knocking on the next door. within seconds and I always had to build myself up after getting rejected, which was most of the time to to knock on another door. And it it it just kinda taught me. Um I guess the power of just

3:50 persistence, right? And you you can kinda keep going. And if you keep going and have that level of of grit and perseverance, then Your chances of winning or your chances of success are much higher. So I was certainly learning that at a very I guess young age. Yeah, from there we we We kinda met Matt went to university as well, and then he dropped out after a year. To sit up.

4:14 and make or develop this Hoddy Bloom through a little bit more of a professional Livel. And Matt, Sim, why don't we start why don't we explore though to India or China? To try and

4:26 Manufacture out Hare Bo. And given I was making them, I thought that was a great idea. And So Matt actually went off to India and China, did a little scowling trip, came back and he said China, let's go to China. And my let's go to China, he said.

4:39 You go to China. So I tapped up. Didn't go my signal or something. Found the most entrepreneurial guy. From my first year at university, a guy called Joe. Drag Joe to China. And we had no money.

4:52 Really no contacts. We went to a little place called Shanto. It was the the middle of nowhere, there were no other Westerners. And we had an apartment. I think it was like Probably the equivalent of eight dollars a month. to rent it was eight floor, no lift.

5:06 So whenever you were thirsty had to get water, you had to like walk down eight flights of stairs go and get water and come back up. And that's where we started, but we already we ended up getting ourselves into all sorts of trouble and strife and there's a lot of funny stories. The story I had heard was that you guys like First night you like slept in a bush. And but basically

5:25 What was the Plan. Go try to find a manufacturer, walk around, like what what were you thinking of doing? We were so naive and on reflection I look back and it's almost like we built a toy company.

5:38 from first principles,'cause we did everything different to everyone else. without even knowing it. So we didn't know that you could go and contract manufacture your product We were planning on setting up our own little That's right. And that's essentially what we did, but

5:53 Me and Joe got into some trouble and Joe had to fly home to New Zealand, so my brother came over. We ended up. trying to see it if we could get a hotel, but it probably was way too expensive. So we decided just to sleep in the bushes at Hong Kong Airport. And I remember just getting completely attacked by mosquitoes or night. And we didn't want to sleep in the ear pool'cause the floral lights were so bright.

6:13 And so yeah, we ended up sleeping in the bushes and getting attacked by mosquitoes all night. It was not fun. And then we fitted up to China and we set up a little factory on the side of a river. It was a small kind of shed, more or less, in China. And my cousin Simon came up at that time as well. He was an engineer to help us. And he welded a production line.

6:33 And we bought we pretty much spent all of the money we had on an injection molding machine. We employed a few people um on the production line. We had a little old lady who used to cook for us every day. I think the budget was Two R and B per meal, which is about thirty cents. And and we started making our first product and then we started making our second product out of there as well, which was a night. Frisbee, which we got sued on, and we had no mone to defend ourselves. So

6:55 So stupid question, but like Why not? Like it seems like it was an insane decision just to go to China and literally Like build your own factory. Like literally like create a structure on the side of a river and like weld it yourself together. Why'd you feel like you needed to be in China instead of just doing it where you were?

7:14 Well, we understood that most of the toys in the world were made in China, but when I say we were that naive, I feel like that is even an understatement. Like we were trying to make our hot ear bloom, but we didn't even realise that We couldn't sell it to any toy chains or large retailers around the world because of course it didn't meet any of the Regal Tree standards. I mean it had a burning can under it. So we were super naive.

7:35 So then we started looking up products that we can maybe make in our little factory, and we saw this company in America making uh White Hap a Frisbee with L E Ds in it. could be thrown at night and we thought, Oh, that's cool. So we made This night. Frisbee. in our factory and I started hustling to try and sell this thing. As in like

7:54 I would email. Every buyer. in the world of every major retailer in every country I possibly could. And I'm remember I sold it. to a distributing in the US and we spent what was a lot of money at the time and I went to New York Toy Fair. And we made this night, Frisbee, and we also made this other pollock or copy this other pollock called a money gobbler.

8:14 Which was a money bank in the shape of an animal, and you'd feed the coins into its mouth, it would go down the throat into the stomach. So we started making these two pots. Matt decided we wanted to set up a wooden wooden toy factory for this money, God blower. We had our production line for making this Frisbee. So I sold them to this company called Shilling. I so I go to New York to work at it. to be on their booth to start selling these two products.

8:35 And I start selling these products and this guy comes flying onto the booth. And starts yelling at our distributor. So he's obviously got one that we've made a product that's identical to his and he had multiple patents for how the LED connected to the fiber optics and how this all worked and of course we're

8:52 Again, we were naive. We didn't even really know what IP was, so He comes and so Dave comes up to me off the booth, the the owner of the distributors says hey network pull that frisbee off the booth. This is probably um an hour into New York to where show starting. So I'm pretty disappointed'cause one of our products is is gone, but I'm like, that's okay, I'll I'll sell the money, but go block. Well if I thought the first guy was crazy. About three hours later, this lady, she has a whole business she's built over twenty five years building these

9:17 Money, animal. Banks and she has this big booth on the ground floor of Java's. And she comes up and she s screams onto the booth and she's yelling and screaming and swearing at Dave. And Dave sort of I can see this from where I am, but Dave sort of wanders over to me sheepishly and says that you need a take The money gobbled off the booth as well. So within the first morning of New York Toy Fair, both our products have been taking off the booth of the distributor.

9:41 I flew back to China, I said to my brother, I said, Have you ever heard of this whole you know, I P thing, this whole patent thing? I think we need to start innovating and coming up with our own ideas. And then we ended up getting into a lawsuit on the Nightflyer. They sued us, we had no money for defend ourselves. I remember going to Colorado because that's where they sued us to try and find a law firm to defend us, and I was going to lease firms and I was saying, Well, that'll be a million or two million dollars. We had black. maybe a few thousand dollars between us at that stage, I was thinking how we're gonna defend ourselves.

10:09 I ended up actually hiring a lawyer, convincing him his name was Chad. He later get got disbarred that we would write the whole suit. He just had to put his name to it. And And Chad did the whole case for us, but didn't really do it. We did it ourselves. We learned how to become awareness. So we did it incredibly cheaply, but he did. He ended up getting disbarred um later on. But that was our only way because the game we had no money. And I was so enthusiastic we had no other choice that we had to sell as potty. And I remember selling

10:36 the night frisbee to the department store chain and the US coals. with the K. I know we have coals down here in Australia with a C. Never forget the buyer's name. I actually still work with her today. This is You know. nineteen years ago. Name was Jin Cyr. She was the bar on Cole's and I would email her every single day.

10:52 And one day I got an email reply from her, and it was all in capitals. It said, Nick, I do not have time for your daily email communication. Please stop emailing me every single day. And it always wrote back Oh so sorry, Jim, but you know, I just think our pilot's really great. We knew we were in a little legal trouble, but we had to sell something to survive. So I I was like pushing and pushing and then eventually I get this email back from her. It was just two words, nothing else. It said seem the sample. So we send the sample to her.

11:19 And she ends up ordering a full container. I think it was twenty thousand units of this night for speech. So we we're pretty happy at this stage. It was a big celebration. We never had a full container order. Vinnie Polite. And so we ship. L full container of night frisbees.

11:34 Uh And of course uh she gets enjoined in the lawsuit. As well. Um at calls. And didn't speak to me again for a long time.

11:44 The irony is today she's the director of family dollar stores in the US and we're their second biggest toy supplier after Mattel. So the that's the funny thing. Trauma bonded Correct. But we have so many of these stories. That is one of meeny, meeny, meanie in those early days. So we really were just scrapping every day to try and survive and sell something and just like live somehow. But we were living on less than A dollar a day.

12:11 Okay, I have two things. One, let's do a detour to the dollar a day thing because Um my guy Diego who helps me with research, he goes, You gotta ask him about the Mc McBroke diet. And the McBroke diet, I said, What's that? He goes he goes, apparently they were just eating off the dollar menu at McDonald's in China every day. And he had some trick about the French fries to get free French fries. So what what is the McBroke diet as far as it was it was we didn't eat McDonald's. McDonald's was a treat. So me and Matt were in China and for Christmas, of course, I think my brother didn't come back to New Zealand for eight years. He lived in a factory for ten years. He had a tiny little room in a factory for ten years. Which is crazy in itself.

12:51 Um but for Christmas we would celebrate by going to McDonald's. And probably the equivalent of a combo is probably two dollars fifty in China at that time. So That's how frugal we were. We wouldn't even go to McDonald's. So But we'd go and we'd celebrate Christmas. I always remember going, Merry Christmas bro to be Merry Christmas pro and you know, finally eat some good food. I look like Yeah, I was so skinny at this point.

13:13 But I'd always play a trick in order to get extra fries is I'll always eat half of them and then I'd take them up to the counter and say, Hey you only filled my fries, you know, half full. And then give me another one. So I could get more. For free.

13:27 But we were so we were like either you know, when we'd go on the train, we'd use a concessionary or children's pass and hope we wouldn't get caught'cause it was half the price. But I look back on it and it was like, you know, a fear would only be twelve R and B or a couple dollars and we'd be saving a dollar. So by getting a concessionary fear. And we did that for years. So what what was driving this? Because like you lived in New Zealand. New Zealand's a beautiful place. I assume you could have just had like a normal life that was like comf more comfortable. And I love like

13:55 I'm a founder. I've been a founder, but I didn't do what you did. I didn't sleep in the factory on like a mat on the floor for eight, ten years. I didn't Live off of the less than dollar a day like Were you guys just like was it You're having so much fun, or you just felt there was no other choice? Or what was the s what was the mindset?

14:12 That kept you going because it was like mult like many, many years Just scrapping. I reflect. Back on us. And it's c it is a little bit hard to understand.

14:23 In all honesty, when you reflect back on it. But I think when you're in it Together. You kind of hold each other accountable and you push each other because you don't want to fail. And I would say Me and my brother are equally as competitive. And so I don't think you want to let the other person

14:40 Uh down in the things. And so you just keep Fighting because If one of you gave up. you're kind of admitting defeat, and so in a sense you hold each other accountable to continue to to fight. And push forward.

14:54 And As well as that. I think We didn't really have another option. We didn't understand like back then that there was even such a thing as going and raising money to build a company or You know, again I look back at the extreme naivety. I used to write ema to my mum

15:12 From China. And she was beside us outfit, you know, I was like, I was so young. eighteen. And I read these e mails. And to understand

15:21 How little we understood it even about the world, but just about business and how things worked. It's quite scary. And so I just think we didn't know any better. We just thought We'll just keep fighting.

15:33 And try and get these little wins and little wins and little wins and you know, we started to get you know, a little win after little win and then we started to get a little bit more momentum and then you started to learn. My one of my favorite sayings is you win or you learn. You never lose, you never fail, so And so connect the dots. So now you're You've painted the picture beautifully of

15:54 The extreme naive approach the scrapping. And then somehow You know. Fast forward the tape and the movie.

16:03 And you end up With this. Super successful toy company. I think you know The third most profitable toy company in the world, doing over a billion dollars a year of sales. Plus for like forget the other stuff you've even done after that. But I'm just saying, just the toy part. So connect the dots, where did you start to really get the momentum or br what were the breakthroughs, the epiphanies, the key key breaks that got you to to actually getting to that success?

16:25 Well, there are a few stories along the way. And I I remember just sitting there every day harassing And thinking really big early. So thinking came out of that time, or I've just got to get these big retailers. And

16:42 You know, one story I remember ringing warm out every single day. And because of the time zones it was late at night. And to month after month after month after month. And I always remember all the early names because I just see it in my memory. And I remember one night my brother was basically telling me to give up. He was like, You're not gonna get warm ups. And

16:59 Eventually. The buyer, Ryan Halford answered. And I was on the phone to the warm up pie from China. And again, I was up with this young company, we're just in charge, we're trying to get off the ground, we've got these products. And he said, Do you have a showroom in Hong Kong? And I see

17:13 Didn't know I didn't know what a shot of the home call was, but of course I said yes, I'll get back to you at the address. We started to learn. that the tour industry at the time revolved around these showrooms in a place called Tim Sha Sui in Hong Kong. All the big companies had showrooms there and all the buyers from around the world congregated in Hong Kong. twice a year. Company showrooms.

17:33 So I got on a train the next day. Hong Kong. And had research where these toy companies were and sort of knocking on toy company doors and trying to do a deal with them. I said, I'll bring a warm up bar and if you just give me some space to use and your address And then, you know, hopefully you could sell some of your products to them as well and

17:51 Every Company denied me. And deny me and denied me. So I thought, okay. We need to rent a showroom. And at the time it was a lot of money, but we found these little glass cubicles in a place called South Sea Center. And they were just a few meters by a few meters, like tiny little cubicles, but I think they would have been like I don't know, two or three thousand US dollars a month to rent because Holo Hong was so expensive. And so at the time we didn't have that money. It was we were so poor.

18:15 But I thought we don't have an option. We've got this chance to get the warm up by coming in. And so we we we we we just did we have to do it. So we rent this little tiny Cubicle. And it kinda had cursins on the inside of it. And

18:28 We I I found some shoveling that someone was throwing out from the other showroom. So I put this little shoveling in there. We bought like a table and then I had a little roll up mattress and I'd sleep in the showroom under the table. each night'cause there's no other room to sleep. So I'd unroll the mattress under the table, sleep in that, and then I'd wash in the little bathroom in the in South Sea Center. In the morning? But

18:49 I had the showroom and I start kinda w realizing that the buyers come to Hong Kong in January and October every year. So that was good'cause now I have this kinda like base to like invite people to. So I get you know, I get Walmart to come in. I actually got a guy called Frank Demico who is from Walmart, Canada. And I'll never forget because he came in and I think he was so shocked that he'd given me a meeting when he saw this.

19:10 two meter by two meter showroom and he came with his two merchandises. I went to shake his hand, didn't shake my hand. He didn't even sit down and he just yelled at me and goes quotes across the table. And I'd filled out the quotes for our two or three products at the stage. He kinda reads the quotes. And I'd filled something out wrong, and he just throws the quotes down on the table and just walks out at least to Hong Kong version. Standing there staring at me. I think that was my second ever meeting, and I'm just like in shock. I'm like, wow, where it's gonna be. And he just storms out. And then I contacted his boss. And say it had this really like bad experience and this guy Frank and I genuinely think he was really rude and like I didn't

19:45 And his boss made him meet me again in their procurement and Walmart's procurement center in Shenzhen. So I was like, Screw this, I'm gonna go up and meet him again, meet him for a second time. And he ended up ordering and at the stage we had a night ball along with our night frisbee, but I think he ordered uh seventy thousand dollars of this this night ball. example of of of persistence. And then I remember one day.

20:06 I had a mean with came out Australia, but I was sleeping under my table. And the door's only about a meter. from my head'cause this is such a little small showroom and the buyer came an hour early. And I was still asleep under the table and She was knocking on the door and I'm sort of like there, like looking at her feet under the door, thinking, Shit, I'm still in bed under my table.

20:26 So we had to wait for her to go away and the message her afterwards and say, Hey you didn't chuck that ten o'clock meeting She's Oh, I thought it was nine A M and So they had all sorts of experiences. But I used to crash by as hotels. I used to post samples under their you know, under their hotel room doors. But really we did what it what it what it would take. The first break we got is And this was a crazy story. It is There was a I was in the UK

20:52 uh at a company called Recreation, and they were selling our night sports balls at the time. So we'd developed this other product. It was instead of our night frisbee, we've made a night football lit up at night and a night soccer ball So it's all for this coming called recreation. I met a guy called Sean. On their both. And he developed. Soka Tamaguchi.

21:09 And so it was it was kinda like a Tamaguchi, but you trained your player and then to infrared. You could play against each other. He had like the Manchester United license and it was selling reasonably okay. in the UK, but he was having tr troubles with manufacturing and I was like, Well we can make that for you, like, no problem. And he was like, Great, great, great, you guys can help me make it'cause we were really sh you know, anything was sort of wink at the time. We were trying to find a way to win anywhere. So

21:33 We're like, Sean, we can make this and then we started talking. Well maybe, you know, David Beckham, he's moving to the US to play in the US. What if we can get the David Beckham license and we could try and sell this in the US? He thought this was a great idea, so we went and pitched at the time. I think it was Simon. Uh Simon Fuller, who started on Era for an idol, had the David Dickham. Um Rise at the time. I'm like a s I'm a super young kid, right?

21:54 And They said, Well we'll give you the day Bickham license, but it'll cost you a million and a half dollars. Course we don't have a million and a half dollars. But then we go to warm up. And Walmart the buyer, who knows Danielle Prominelle, never forget it.

22:07 She loved David Bickham. And he was moving to the US and she was just obsessed by David Bickham. And we probably Blew a few bubbles, but Anyway, as it turned out, Walmart turned around and ordered two point two million units of this David Bickham. Tamaguchi.

22:24 Which I think they were like fourteen bucks, fifty or something. It was almost thirty million US dollars. So keep in mind we've probably never had an order more than seventy thousand dollars at this point. And our total revenue is like in the hundreds of thousands. Suddenly we get this order for almost thirty million US dollars. And then we're like Holy shit.

22:42 uh we thought we were gonna make a lot of money'cause we we had huge margin. We were making this thing to three dollars and we were gonna make this thing to three dollars or three dollars twenty or whatever it was and sell it for fourteen fifty. So we were sort of counting our pennies and super excited. We didn't even understand that sulfur was a big thing. But then we were like, Oh no, we have to work out how to make this pot. Like, you know, we've got our tiny little factory with, you know, twenty people in it. There's no chance we can make two point two million units. So when I'd first gone to China, I've been on a tour. With

23:09 He's one of the wealthiest Guys in Hong Kong like from Francis Choi owns Burley Light International, now the contract manufacturer for Hasbro and Metal and toy companies. One of the first factories I ever toured, I somehow got in touch with his two I C guy called Wilson. And he'd taken me on a tour as an eighteen year old with their factory and you can imagine Me coming from New Zealand and then going to these factories with hundreds of thousands of people and just being like, Hol what this is like insane.

23:34 So I still had this contact with Wilson from early light. So I got a meeting with Wilson. I said, Hey, we've got this huge order. two point two million pieces, can you help us make it? It's yep. And then I said Oh, and by the way, can you also pay for as well? He said, Let me check with Francis. Come back to came back to me, said Yeah, if you transfer the letter of credit to us.

23:53 you know, will help you. Pay for it as well. Great. So we start making this product two point two million I Cs, two point two million L C D screens, two point two So they

24:02 All the components and then Walnut turns around and tensels. Uh they they cancel it from two point two million pieces down to W Eight no, one point two million pieces. And I was like, No, they can't do that. We've got a letter of credit, they've made it all.

24:17 And then on flying back and forth at this point, Seoran's kinda like in the background on this like I don't know, twenty year old. And I'm thinking, there's no way but I was thinking, Well it's still fine, one point two million pieces we've got so much margin on this, we we can still make like good money out of it. But then they turned around and cancelled it all the way down to three hundred thousand pieces, yet Francis was making all of this product and I was just like Oh, that's all I'm going Batman forward.

24:40 It reads like ca some kind of soap opera because Danielle got fired. Obviously part of this was part of it. And with Francis I was like there's no way I can tell Francis That You know.

24:51 That I've canceled this many pieces and he's paying for it all. So I'm going back and forth to Walmer and I calculated that if I get the order back to eight hundred thousand pieces. we could still pay Francis off'cause we had so much margin and still make like a million and a half dollars. And eventually I convince Walmart to to get the order back to eight hundred thousand dollars. Uh eight hundred thousand or nine hundred thousand pieces, whatever it was. And we ships.

25:14 This Right. And it was a disaster. Like it hit the shelf. And it was culprit on the shelf. Like no one would buy it. I think they retailed it at thirty dollars, they discounted it to twenty five, then twenty Then fifteen, no one still buy, then ten dollars, no one bought it, then five dollars, no one bought it. And then they eventually sold it to the dollar and discount channels for like fifty cents on it, like fifty cents apiece. And then of course Walmart came back to us and said you have to fund all the markdown money from thirty dollars to

25:41 you know fifty scenes and we were like What's Martin Gowm? Money. And we were determined to keep our little bit of margin and refused to give them any money back. And

25:51 So we had this we were like no, but you cancel these pieces and like da da da da this huge thing. Anyway, we got Blackball from Walmart for like five years. We never did business with Walmart after that. And it was not three years later. That I met Danielle's boss at New York Toy for Yeah. Laura. Philips.

26:07 And I wrote this big long email of everything that happened and like and and we started to work together again. But That was sort of our As crazy as it was, that crazy story was our first break to actually make a little bit of money. And then from there. I started doing deals with US companies that only sold product in the US but didn't sell internationally. So I started doing deals with them because we were really bad at designing and the Valkan toys, terrible in fact.

26:32 So we needed good product so I could open up these channels. So I do these deals with American companies like Zing or Zoka, I did deal with the Australian company called Yoho. to take their products and sell them internationally. And that kind of and I'd tell a big story that I could get their products in everywhere, then I have to go out and hustle. So we had a product called ZDs, which became really successful, and a product called Schnooks, which was out of Australia, that became really successful. So we started kind of taking other people's products. How did you figure out that model? Because

27:00 You know, did you see somebody else doing that and you're like oh that's Much simpler than what we're trying to do, or did you fall into it? Like It seems like you didn't use a lot of like mentors. You did a lot of uh running around with a fork, sticking it into outlets, trying to figure out you know, where the where which ones are working. There's that is a great Analogy. That's exactly what we did. We just

27:20 To be honest, we were making these products in our the second product line we made were these night Balls, but the plot was so bad. Matted. would move factory by this stage. And the engineering of them

27:32 Was so bad that they had these sort of phobe EVA patches glued into this frame. But the production I I actually was getting quite a few orders. I was hustling around and getting orders, but Matt couldn't produce them because the production was so hard to do. And I get so mad at him that at one point I said, I'm coming back from Hong Kong. I was living in my showroom and then from there I upgraded. I was living in a dorm room with eighteen people at a place with country mansions in Hong Kong. So I wasn't exactly living the life in Hong Kong. I was getting these orders, my brother couldn't produce them. So I was like, I'm coming back to like to China. To take over the fact trick. Well there were two words of Chinese, one was Qaiman, too slow, and one was Kwa Di, let's go faster.

28:09 And we ended up like produ I was like on the production one pushing To get these balls. out the door, and I remember they were coming off the end of the production line half manual and I was just like ship'em. Just ship'em. Ship the balls, and gotta ship them. But I remember years later, like you'd see these things on shelves and all the E had gone out of them, all EVA patches and peel off them and there were just these shrivel up little prunes sitting on the shelf. I love that you're honest about it because there's so many people because it's a very sexy thing to be like

28:38 You know, it all all that mattered was product and we really just built a great product and then everything worked because we built a great product. And like I know I know I've been there. It's like, dude, the first version of all my products sucked. In fact, the tenth version still kinda sucked. And y I think I love that you're kind of unabashed and honest about like Look, we weren't super innovative. We saw shit working and then we were like, Cool, we could do lights on a Frisbee, lights on a ball, like that. Okay, well, let's copy what works. And that your product kinda sucked and you were just like

29:05 Basically you just kept doing door to door sales even Like at a global level, you just started doing glob like door cells. And literally it sounds like It was like distribution and Salesmanship and marketing that was keeping you afloat at the time. Yeah, well we would sell I would sell a part to someone and then we uh we wouldn't get a reorder. We didn't know what a reorder was.

29:25 Because the part through the yeah. And then we just sell a new product to a new customer and we wouldn't get and I'd just held to another customer. And we didn't know for probably seven or eight years. what a re order was. Like we had a product actually sold off the shelf and the customer came back to buy more of them. But we could like continually hustle to all these different customers. But we did crazy things like we

29:45 Like a little bech on it, and it was kinda nuts. Like we sold this product. The night ball. We got a distributor in the US called Spin Master. They're one of the biggest toy companies in the world. Yeah. Very similar story to our own free Canadians built uh this this this this toy company. Very similar to us. And Spinmaster had agreed to take a night sports falls for distribution in the US.

30:06 And I'd kinda hustled a few retailers and so it was this It was this should we sell the root to retail, should we use Spin Master? That'll really put lots of T V marketing on. T V marketing at the time was the the thing. And they said we'll we'll run this test in Cincinnati. So we'll put your nightballs into all the Walmart in Cincinnati. And we'll run media in that in that city and then we'll decide whether to roll this thing out. And whether or not it was dishonest, I think it was more desperation at the time, but of course I flew

30:33 to where the test was. I got to New York and I couldn't get a flight to Cincinnati. Well I could, but it was too expensive. It was summer holidays. I went down to the bus station. I remember the bus station in New York at the start of summer holidays, just like nothing I've ever seen. It was absolutely chaos, but I got a Greyhound to Cincinnati. I think it took like thirty hours, it broke down, stopped different places, a Greyhound to Cincinnati. stayed in this absolute like Terrific place. But every day.

30:58 And yes, this is a little bit dishonest, but we were desperate back then that I would boss. I'd get the bust schedule, I'd bust to each Walmart. I'd give people cash to go buy a ball. I'd go out and buy them on different credit cards myself. I was so paranoid that we'd get caught just to help our test sales. Go off a little bit. And I would buy all these night sports balls, but it was a long day because the warm ups were all so far apart. And I was like taking this bus schedule to get to each one. I stayed there for a month.

31:25 And I almost got killed in a place called Over the Rhine. If you look it up, it was the most dangerous neighborhood in America at the time. Over the Rhine, it's like Wild it was over these railway tracks. And I managed to walk down there in the middle of the day. And

31:39 it was the scariest thing of my life and I had a guy come up to me and he said, What the fuck are you doing here, white boy? And And I was like, I'm just a tourist. And I hadn't realised I was in this like area. And then I managed to somehow, like weeks later, walk into it. I was walking back from downtown, there's no such thing as Uber back then or taxi, so I was trying to walk back to where I was staying, which was very close to over the Rhine. And I walk in the wrong direction. I walked in there in the middle of the night and I got chased. Um and had to hide. That was very funny. But um yeah, we were doing this to to get our test results up. Which

32:09 We had a good test and then Spin Master rolled the product out. Of course it wasn't a it was a great product in terms of its construction it was the same thing. But my God, did we have to hustle. We had to strap and fight so hard to to j like literally just to survive. But we got to a point where our we were we were selling enough to each new customer of each new product. And we weren't getting re orders, but we were profitable. And it was actually funny because after the David Bickham thing we made like that million and a half dollars or whatever it was.

32:35 We got a little bit fat and happy and we had a month where we lost two hundred thousand dollars. And I remember sitting we sat down and we were like, Oh my god, we've lost money this month. And we were like. From this day on we will never have a day, a month, a week. A year will we lose money, like if we're losing money in a month. We will like sit down, we will like eat nothing, or we will like get rid of people, or we will like live on nothing just to ensure that we're like profitable.

32:59 'Cause people wonder how do we get to, you know, a few billion re uh in and a few billion dollars a year in in sales now. And we've built it completely organically. And the truth is we just'cause we like were so frugal and we start building s our business got more and more and more profitable just every year of twenty years. So it was almost this cognitive process to how do we remain profitable and then that's just compounded over twenty years and we've just gotten more and more and more profitable to the point where Um, percentage wise by far the most powerful poor company in the world where we run it like

33:29 forty percent net profits, which is unheard of in any place. industry in the world, and the product industry in the world, let alone in software companies. So So we just built a very, very different model. That's why I reflect on it now. It was almost like we built something from first principles, the way we set up factories, the way now we automate all of our production, the way we don't do domestic uh shipping, we do all FOB, the way we centralize all of our content and data systems around Markland globally. We've almost built this company from a first principles approach'cause it's so different to how everyone else does it. But we did that more through naivety than through planning.

34:01 So you're starting this kinda like eighteen years old when you go to China. Do you remember how many years it took you to get to your first You where you made a hundred grand. Or when you made a million dollars. Like how many years was that? Well, it was probably a couple of years where we started to make money. But we still lived the same way because we needed that money to fund our

34:20 growth. Effectively, you can't grow to billions of dollars a year in sales organically without borrowing money or going to a bank unless you're super profitable to continue funding that Growth. And so we started to make money. But we nearest me that we still lived. The same way. I still lived in a dorm room.

34:37 In Hong Kong. And so for years. For probably eight. Years.

34:43 As we slowly moved and built bigger batteries, Matt would always have a tiny little rude like a tiny little rune in the back room. And that's where he lived. In general, with no other like No interaction really with anyone else. And we were going crazy in those first years in China. Like um I looked back at it and like we had some

35:00 Serious problems. And so you um You take it all the way. At some point you start Figuring out toys that are New, novel, good products. Like I've bought your bunch of balloon products where you fill up

35:12 I don't know if it's like a hundred or five hundred now, like a hundred water balloons at once you can fill up and like it takes like fifteen seconds to fill them all up. So you eventually start making good products. How did that happen? So There we it was sort of a parallel path. We were taking other people's products and that was helping us really open up distribution. Oh, and hustle and get them into all the retailers across all the countries. Is an email. That I've seen internally that I had from like twenty years ago, and it kinda lists every country in the world and all the retailers and distributors I was working with at the time trying to sell the products to.

35:42 So we're really uh pushing out to everyone. And at the same time we were starting to learn how to make building a team in China and engineers and like some designers and we're starting to sort of parallel path uh building our own products as well.

35:59 But I think I'll a big break after Z Bees came when we did Robo Fish. Yeah, Roberfish are still we still sell about eight million of them a year today. And This was a Chinese inventor. We ended up getting sued for this as well. We're a five year lawsuit, but

36:12 A Chinese and being tech called Xiaoping, and I met a guy in Hong Kong a French guy who had a factory in China, was running a factory in China and he was doing some brokering for some for some inventions and he showed me this rubber fish. I actually didn't I thought, eh, that's cool, didn't think too much of it. Then he showed my brother and my brother love though. He's like, We've got to make this robefish promite. And part of the deal was we had to make it in their factory if we licensed it from from them. So we licensed this fish and it was like it's got little carbon sensors, very, very clever design, it has an electromagnetic coil in it. So when it touches water, it's all micro, it swims and looks like a like a real fish swims in all directions and it's water activated.

36:49 So we start making this fish and then The guy who was the inventor had worked at a US company before, and he had tried to sell the invention to them, that said no head signed a release on the invention saying no problem, you can go sell it to anyone else. Of course, Roboflush blew up came one of the best selling toys in the world, and then he decided that Actually.

37:08 The inventor had designed some schematics or diagrams why he was underemployment and he would sue us. 'Cause they were still on his computer systems and so we're in this long old warsuit. But even worse, we finally had like this massive pit. It was like the number one selling tour in lots of countries around the world. It was it took us to I think we did like a hundred million US dollars. So this was like a big break for us.

37:28 But unfortunately. There's always a curveball. the factory that we were bound to make it with. Wait, bank robps. In the middle of production. But we had to design so much specialist.

37:40 production, not just the tools, but all these fish were tested underwater for precious, that didn't leak and there was just There's ton of like specialized equipment that have been built to produce a Robofish. They were all slightly the weights had to be perfect. So this whole factory gets

37:55 Shut down. Of course the w wars in China mean that The factory workers are the first creditors, essentially. So they send the army in to like stop anything or any assets being taken from this factory. So we like peak rubber fish production, peak demand. Finally we've got parts that are selling and everyone's scrambling. There were retailers that wouldn't talk to me for like seven years.

38:15 Actually one of my good friends today, it's one of the biggest independent retail chains in the in the UK called the Entertainer. And the Sun of the Odor. Stu one of my closest. We're close friends today. He wouldn't even he didn't even talk to me for eight years. Like I couldn't even get an appointment with him, but suddenly when Robofish took off, suddenly all these buyers were coming to us and hey, like yeah like that roverfish

38:35 So you gotta imagine we've finally had this momentum and then this happens to the factory and we are We're like Yeah. And it was crazy, we could not get into the factory. So my brother We had to do

38:49 And there's again, there's so many of these stories, but we were like, We have no other option. We have to get our tool, we have to get all our equipment, we have to get everything out of that factory and we're relocated to another factory, but the army was there, everyone was there, you couldn't get in. So in the middle of the night my brother got like Eight trucks. Got all of our team from one of our little factories. Fill these trots with

39:09 With people. in at like two, three AM in the morning when there were less people like camped out at the factory. pulled up to the factory, paid a bunch of bribes to go in. took all the trucks into the factory. All our people went in, picked up all of the tooling and all of the equipment. Loaded up all the trucks in the middle of the night.

39:27 left and we went and relocated to a new factory. So we can continue production. So it was uh it was crazy. But that was like again, like nothing ever happens without a hiccup, right? Like it was sort of like we finally felt like we had momentum and then this happened. So How how old are you now? Thirty nine. Okay, you're thirty nine.

39:45 Do you still go as hard or like are you still as nuts as the early version of you? Like do you still have the same Drive or are you human and you're like, you know

39:57 Yeah, I used to really Be super you know, super driven, super resilient, going going really, really Balls to the wall. And now um You know, tired and whatever, you know. I I'm I'm an I'm an old guy now. Like w do you still have it? I we still have it. I think we still are just as motivated today, if not more motivated than we have ever been.

40:15 We say a pretty good Pretty. Cool roadmap ahead of where we want to get to over the next ten years, particularly with Zuru Tech and building houses on production lines and Zuru Edge or So let's talk about that. So Can you just summarize how big is the

40:33 How big is the the empire today? So we're over two out of a billion US in in revenue. Yeah. Uh we're drawing it about twenty five to thirty percent year on year. So that's comparing?

40:44 But I think the thing with us is Is our revenue is one thing, it's just how Profitable. built the business. And it's public or it's not a not a public company? Not public.

40:53 Okay. So privately held Super profitable company. That's like a billion dollars a year of profit, basically, out of the toy business. But then you have this diaper company. It's you started you started buying other companies, right? Not so much buying. I I actually got chrone, so I got Sick.

41:10 in China and Hong Kong. And I had to have my bowel, my large intestine removed. This probably has something to do with living in China for all those years, eating incredibly poorly, I'm not sure. But I had to move home to New Zealand to get surgery, um, about six years ago. And

41:28 It ended up being A great thing. So I was in Hong Kong I I came home for the surgery, I was meant to rest for a while.

41:36 And I was sitting at home. And I was getting restless trying to rest as I had my bowel my large bowel removed. And I had a friend who had started uh small bhaka business. And he was doing like fifty grand a year D to C in New Zealand. So really, really small. Having met me away at it for three years. And I thought, well, I may as well help with this. But I'd always thought like Toys is this

41:56 industry where there really is a ceiling the size of the business you can grow just'cause of the That Yeah, the addressable market, the size of the market. Also, you've got brands like Hot Wheels, which are super hard to disrupt. And

42:09 I was looking at Ethe M C G and I started to realise that There's like nine companies that dominate eighty percent of it globally. And when you build a toy business, you work in every material form. You work at speed, like speed of innovation is your DNA. You build this muscle. The speed.

42:24 And working fast and innovating. Because you reinvent forty, fifty percent of your entire pot, right, every single year. But Because you invent so much from your product line every year, it becomes really hard to keep growing, right?'Cause you've got to reinvent to to to catch up every year. And so I started to form this thesis.

42:42 About six years ago, I thought, Man, we're so good at automating and we we sort of I would classify Zuru today as more an automation company than anything else. Like The point this is. Almost sick and rate. We build incredibly sophisticated automation. We had a huge automation team. So whether that's building a house on production lines with robots or a dark blaster with robots.

43:03 It's Um you know, a big part of what we do. So You know, I was like we we've built this automation muscle and the speed of innovation muscle. And I feel like these big E F G companies, they one, they don't innovate, two, they have a lot of duopoly. So if you look at Pit Food, it's Mars and Nisley. If you look at Baby, it's Kimberly Clark and Pocker and Gamble. If you look at beauty of personal care, it's L'Oreal and Pocker and Gamble, or the Unilever. So there's a lot of m if you look at laundry, it's pretty much just potter and gamble, the time of the universe. So all these duopolies and monopolies. Across the board.

43:30 And through that they were delivering much margin to their retail partners. They really held the The power? And I met I remember mapping out Walmart's revenue and I mapped that against the top eight FM C companies in the world. So Walmart did more revenue than all of them combined. But they what's that what's that acronym you're you're saying? What M C G what is that? are ETHM CG fast moving consumer goods. So ETH M C C P G consumer package goods. So

43:54 So If I looked at Proptrand Gamble, Nestle, Mars, all the biggest FMCG companies, collectively their revenue is less than Walmart, who does six hundred eleven billion. But then Walmart makes only a fraction of the profit. They're all public companies, and the big FMCG companies make the Lion share seventy five percent of the profits. So I thought is there a world in which we can be disruptive in F M C fast moving consumer goods? Can we deliver more margin to our retail partners? Can we innovate faster, bring our speed of innovation mindset? to to these categories. And can we reach customer in a far more efficient way?

44:25 And can we move at the speed of culture? And obviously at the time digital and data driven advertising was, you know, starting to become a bigger thing. and you know, tired of advertising. I was sort of looking at baby and I was thinking, Well, you've really got a mum a mum who's an incredibly targeted audience or a parent who's an incredibly targeted audience, how can we serve the M and Ed every single day in a targeted way rather than just like wake up media, so that's a super efficient way to reach our customer. Or if we build a bit of product.

44:50 deliver more margin and position it at a better price. And that was kind of my overall thesis. Can we do this? And can we run our same kind of first principles toy model like FOB so we don't hold product super lean. large ametising dollar spin, but in a really centralised, um control way. And I thought okay, I can do this. So I worked with my with my friend and I said, Okay, let's launch this diaper brand in New Zealand as a test market. And

45:15 Within one year I think we're taking forty percent mark this year in New Zealand, launching a die, but And I remember meeting Greg Fawn, who was CEO of Walmart at the time. And he's in New Zealander. And I met him in New York. And I was like, Greg, I you know, toys is great and it's been this it's this incredible university for us'cause it really allows us to you know, it's but you would build skill sets that is very hard to build in any other industry. And I said, We're gonna take on dieters. And he turned to me and he said, Nitt ever heard of Cocope?

45:41 Like he was saying that it was gonna be that hard to crack. Like Pampers and Huggy's are gonna be that hard to go disrupt. And I said I get you, but I think we can do this. I'm gonna give it a go. So we launched in New Zealand. The second biggest brand in New Zealand was Treasures. Huggy's was number one. Treasures was a local brand. Their share just plummeted. They ended up going out of business and and having to sell the brand for

46:04 And you're spending a ton on Facebook ads, or what are you doing to time Facebook and then it progressed to Instagram, now it's progressed to TikTok. Like it sort of always progresses, right? Like so you've got to move at the speed of platforms, but you've also got to move at the speed of culture. So how do you move at the speed of trends to build content to move at the speed of culture? Was that a new, newish skill set for you? Cause it seems like the toy company was retail driven. Yeah, well, YouTube was starting to kind of thing, but it was mainly TV advertising for toys at that time. So it was still TV was predominant and then it kinda switched to to to YouTube. So today we don't spend any money on TV and toys. It's all YouTube, it's all TikTok, it's all YouTube shorts. So it really like the platforms change and and how you reach people. But so I had this thesis, but we just quickly took all smart share in New Zealand and I was like, Holy shit, we can make an incredible volite. But To be fair, success is a bad teacher. Like we just got the success out the gate. Rascals just

46:51 We won't spare right. I just Took off. And so I packaged up that case study, went to Australia, went to Coles, and I said, Hey, look at what we've achieved in New Zealand, look at all the margin we're delivering, look at the category share we've driven. We helped foodstuffs reverse their category share decline. Like they were getting hammered by the competitor Woolworths here. We inverted that. We took them the other way. So Coles was like, Love it.

47:14 launch with Coles, same thing. We won Coles non Food Supplier of the Year award in the first year. And just help them like take heaps of category shear. So I was like, wow, this really works. Took about more weeks to the US, went to Walmart, was like, Hey Walmart, we could help you. Disrupt, you know, you're two big suppliers here, and they gave us a Dallas test. Same thing. We became actually last year Walmart's fastest growing brand, total balls all categories with rascals.

47:39 When to Target did the same thing with our brand Millie Moon. Millie Moon actually just overtook private label and High's the second biggest sub brand in Target in under or about three and a half years. Which is incredible. So it was sort of this like wake up moment that wow. And I think last year we produced two billion diapers. And this is all in under this is all about five and a half years. We're we've we've built this business so well over a billion dollars of retail sales last year in diapers in, you know, five years. So from start to to t to go a billion dollars a year, shall I say, and growing incredibly fast. Like this year we're gonna grow thirty percent um again. So this was sort of a an eye open for me and I thought, wow, we can do this in all F M C E categories. So I started testing in New Zealand and losing. Like we tested infant formula, didn't work. We tried FinCare, fails, we tried like

48:22 Oat milk fail, I did all these little things. I started failing and I was like, Oh Uh. My partner at the time, Jamie. Had a background in luxury PR and and beauty and was huge beauty enthusiasts. So I said, Hey, don't do that. Let's start a beauty brand. And we start on Monday here, yeah. And which is the little pink bottle Forbes goal up.

48:39 Last year the most famous shampoo and conditioner bottle in the world. But we launched that peak COVID. And that was the sequel on it. It just took off. We I think in Australia, um We won product launch of the year and we had five of the top ten in total Pair we overtook pen teen in sales.

48:54 What do you think is the difference between the ones that worked and the ones that didn't? Is it category? Some categories were just more ripe. Was it you nailed the packaging and the positioning and that's actually the thing that matters most? Is it luck? Dipers was is driven by price and performance and we were the first one in the world to take a China diaper to the world and China's making the best diaper in the world. So in China there's like a thousand domestic brands all competing. So the technology and non wovens and substrates and SAP and machine technology has just gone like that'cause of all domestic competition. So we took the best product in the world to market.

49:23 at the disc price in a category which is price and performance driven. So it's not even gonna be price and performance driven in a performance driven category. Or you've got to be innovation driven. So we launched Yummy Yum, which is super innovative to picture point, like really innovative. And that was just

49:39 your innovation that made that like take off. So innovation or it's gotta be design and creative. So Monday was Yeah, it's still a bottle of shampoo, but incredible design and creative. And then we just owned TikTok as in it is the number one hair care brand in the world on TikTok. And by a long way. Um

49:56 And it was just the right design, creative positioning, branding, marginal, and it just took off. And I think last year in the US it was second only in total growth. And here to Proctor and Gamble's total he key portfolio, just the Monday brand. And so then I started to learn kind of which categories Would work for us?

50:13 And we've gone super deep in those categories and we've applied our same model. So building all the factories in diethas, we built a factory, I think it was nine months. To reduce and we're doubling the size of it right now. So we'll have four billion diaper capacity by next year. In beauty, we built the whole factory, everything under one roof, and jiction moling, rotor moling, filling. uh mixing all that we've built all the lab in Shanghai, we've got L'Oreal. I'm formulation specialist over, you can leave a formulation specialist. So as soon as we found something that was working, so I was outport sourcing to begin with, then we do the Zuru thing, which just goes super deep. automate everything we possibly can, put all AG Vs in, so every little part of it we want to like automate as much as possible.

50:50 And then Pet Food I started at the same time. I bought a young guy who won New Zealand's high school entrepreneurial program out, a guy called Alistair, he's incredible. I said, Let's start a pet food business together. Actually we were at the supermarket and we said, Let's do pet food. And so now we're getting huge momentum there. Um one of our brands, I think Bonkers was drove thirty percent of all cat tree growth in America last year. And then we experimented in supplements, which has been a little bit hard. I built a brand with the Kadashians called Dosinco. We ended up selling that last year. It just it it worked everywhere else in the world. It failed in the US. So as soon as we don't have the scale of the US it's sort of let's exit it.

51:23 And supplements. We've sort of struggled with our brand habit, which is sort of taking away. And then very much um home care. We're building a a bunch of brands as well. So sort of end convictionary. So we've built this What I call our five vertical strategy. Um and we're going very, very deep within all of these um verticals. And I think all of them individually can be bigger than

51:44 A toy company within yeah. Two or three years. What's what's the dream? Like so why Why go so hard? Why do so many? Like you could Just off the toy company. You could be sitting on a boat you own, looking at an island you own with a you know, a beautiful drink in your hand.

52:01 Is that just y you you love the game? You w have some dream, you wanna be a hundred billionaire. What's the What's driving doing more and more and more? I think we love it. Number one, love having a thesis. Love competing. For me it's it's sport, right? Like it is sport having a thesis, going into something, working it out.

52:20 And As we build these things, the toys business, the age business, the FMCG business. you know, as you become more successful you think, how can I solve bigger problems? And Same person grew for all I said, You gotta wrap your business in a bigger purpose as well. And I thought Well, we thought how do we solve bigger problems? Because we're almost in a privileged position now, right? How do we go on and actually solve bigger problems, which is why we've started building Zuru Tik over the last what's actually been eight or nine years. Can you explain what that is? So it's a crazy moonshot idea. I think you have you either have or are building

52:52 The largest factory in the world. Period. Um what what are you what is the what is that idea? What is Zerutec? So Zerutec. The thesis really was If you look at the construction industry, it's been done the same for

53:04 hundreds of years, it's also the biggest segment or market in the world, construction, property, development. And The idea was How do we build the first factory in the world that has a customized input? So the design Of a building.

53:20 And a fully automated output. So how do we Build buildings for a small fraction of the cost of what you build a building for. Today.

53:29 And And we're now We we started off so we built our software which is called Dreamcatcher. which is built on Unreal Engine and it has an incredibly simple UI sort of user interface. But

53:43 the logic layer or the coding layer below that is incredibly, incredibly complex. We've cataloged every building code in the world. So you can drop a pin on any location in the world that maps the terrain, it does the building code, and then you can design your house or building or whatever building you want and our Dreamcatcher software. We've also built our own AI assistant or on our own large language model. Um Called Queer, which is Basically training It's training our model on

54:08 All the great architects so you can talk to Your Building and builds it in front of you, you can put a two D plan in, you can decide on this room I want it to be Stockholm style and furniture and it maps all the furniture and does it for you. So it's incredibly intuitive software. Basically a teen year old can design on Dreamcatcher.

54:27 And then it does all the structural side, it does all the E VP, the mechanical, the electrical, the plumbing, it does it all in a super intelligent way. Wherever you've dropped the pin where you're building the building, it works out the orientation of the building for the sun, it works out how many HVAC units you need, it works out how many solar panels you need. So basically then the software. translates every part into our factory. Our factory builds every single part and it's completely automated and the factory is designed from start to finish. So originally we built a one fifth scale factory. So that's to test the software.

54:58 with the hardware and how that all integrates together. So it builds these mini houses that one fifth in every dimension. And then we m once we had got that working, we built a it's about a three hectare factory and it's a test production line. And that right now is producing That's we're testing the software at full scale with full scale houses and we're building a house. about every two weeks right now, which is test and then we have like a hundred little changes and we go in software changing it.

55:23 And then we bought a factory or a or a building is twenty five acres in size, which is our first commercial factory for producing commercial houses and then phase four will be building um one of the biggest factories in in in in the world. I think second own eight to Boeing is is the plan, so that's all um planned out now. But

55:40 We are building a house for five hundred dollars a square meter. And it's the best quality in the world, irrated concrete, ceramic tile, but we have innovated every single part of the process. So we have the wall module, the tile module, the window module, the lighting module, the smart home module. And every single team I think is the best in the world of what they're doing. So it is a huge project, it is a massive undertaking. I think we have Seven hundred software and hardware engineers working on it. Are you self funding this?

56:07 Or did you raise money for that? Yeah, we self fund it. And so we're getting very close now to a final product. We think we're five test houses away from Getting it very close to to perfect. And then it should be um transformational in in in terms of how the world builds. And anyone can use Dreamcatcher the software. So you could go on to Dreamcatcher and there might be a million different two bedroom houses that have been designed by people on the platform.

56:30 And you can look through them, you can put a price on selling your own design, you can go through them in real time, you can stage furniture. We'll have a marketplace Ikea could digitally scan all of their furniture into our marketplace. Artists could digitally scan all their art things, so you can put it in your house, so you can go around in real time and see it. And so the software is really uh the software is really incredible, um you know what what what what we've built. So super exciting that we're we're getting so close now. And the the houses that we're producing, um, each couple of weeks are uh are really incredible.

57:01 I mean this is a Insanely cool idea. Uh just to basically it's like like if you go to the website, it looks like you're looking at the sims, the video game. Like Like you could just kinda like zoom around a house, you can like move things, whatever, but you're saying there's a button where you just basically click print. And then the house gets built in an automated factory, which is just a uh m kind of mind blowing idea. How much are you gonna put into this funding wise? Like you must be push this must be in like

57:31 You must be putting hundreds of millions of dollars, is that is that right? Or am I overestimating? Maybe it's any a watt. For sure. So the software so we have three offices in India on the software side, Puna, Kakana, and Underman. And we have two in Italy. uh Milan and Moderna. The reason in Italy is we actually acquired um years ago the software part of it. It was two guys, Martin and Alicio, the parents both architects that decided that architectural software

57:55 was built on incredibly old um software stacks. And so they were like well gaming engines are Like going like this. And so they decided to build software or architectural software on Unreal Engine. And so we acquired them and that's sort of the reason I think we have about hundred and sixty hundred and

58:13 sixty or so people sitting in Italy on the s on the software side. And then they work with India on the software side. And then in China we built all the hardware. side out. So we have three sites where we're doing all of the hardware and automation um development. But We're kind of parallel to our automation team has sort of grown and parallel. We

58:29 You know, they automate For example, we produce fifty seven million dark and water blasters a year, but we produce a dark blaster from a plastic granule. through the finish product with no people, our competitors like Hasbro that outsourced to factories who still produce with jewels on production lines. We're now building out automation two point oh where we're using vision and machine learning, so we can actually change out any molar blast on the same production line. It can see the molds and it can see the shape and where all the screw holes are. And it adapts completely. So we've kinda paralleled like

58:59 Parallel our automation. with building a housing project, but also taking all that expertise and building across our Zoo Edge and and toys business, which makes us um so Uh so disruptor, but the big differences is when we automate a pilot in FMCG or toys You're making the same product over and over and over again with robots. This is incredibly complex'cause you're building

59:20 a tailored polite for every building site in the world. and every building code in the world and it's different every time. And So having that fully automated. output with a fully customized input has never really been or has never been done before in the world.

59:35 Dude, you're a madman. Um, do you even like who were your peers. Like who do you relate to Um do you just read like an Elon Musk biography and you're like, Oh, that's the only other guy in the world who I I have something in common with? Like is that somebody you admire? What what We have a huge admiration for Elov. We've been big Tesla Beckers and fans for a very long time. Do you know them?

59:57 Uh I had a chance to meet him and then I had to fly home for an emergency and so I actually Don't know him. Um But my brother My brother was very similar to York. So my brother was sort of the the driver behind Zuru Tech and our our building project. He's very similar in his way of of thinking.

1:00:14 I think. Like Eon calls it the idiot index, for example, right? And the idiot index is when You look at the cost of A rocket.

1:00:22 Well he looked up the cost of what a rocket used to cost to build. And then he looked at the cost of the materials. And it's like, you know, hundreds of times the cost of materials to build a rocket. And he's like, Well then he takes a first principles approach, he breaks it out and he works out effectively. you know, how to build a rocket. at a price that makes sense based on the cost of the raw raw materials.

1:00:41 I mean, we're having a similar approach to how we build a building, whether it's uh one story or a hundred stories, it's look at the cost of materials out of the ground and look at the final cost of the building. The idiot index is really high. And so same or similar type of thinking. So how do you go back to your first principles approach and do it from the ground up in a completely different way? Did you see um the other day, I think yesterday or two days ago Boom Supersonic did their first supersonic flight. I don't know if you followed this startup. I did, yeah.

1:01:07 He worked at Groupon, basically. And he's like, you know, a product manager at Groupon, selling coupons on the internet. And then You know, for fun was basically having a you know a hobby of flying and then gave himself a year to from a first principle's point of view. Uh understand how planes work and figure out if there was some business he could build in the plane you know, around planes because he just loved

1:01:30 Planes. And while he was building his spreadsheet, he was just like, I don't get it. There's no reason we shouldn't be flying supersonic speeds right now. And then he took it to like professors and others. He's like, Where where's the error in my calculations? Cause this is telling me we should be doing supersonic. And they were like, No, there's no theoretical errors, uh, just no one's doing it. Like there's no courage is the limit. Not like there's not a materials problem. There's a courage problem. There's a entrepreneurship problem.

1:01:56 And seeing that go f you know, yesterday to doing their first supersonic flight was super inspiring. Incredible. So you you're doing all this stuff. Do you like have hobbies? Do you do stuff outside of this? What's like what is fun for your is this is like my cup is full with this. Sport. We love it just love competing, really. So anything that has a competition element is something that I get a lot of enjoyment out of. So

1:02:20 Yeah, certainly uh tennis golf. Just sport in general is is is something that enjoy doing. But um Yeah, as you get older, like, obviously. We don't I used to think you wake up every day with that pit in your stomach'cause you're wondering what's gonna go wrong today and what do we have to solve today. So you know, obviously we don't have that that issue any longer and and definitely get to spend more time with family. I finally had my first child. Last year, so that's uh been a big change. It definitely

1:02:45 Changes your To speak them on things, I think, which is Which has been really good. I was sort of kick the can, delayed it as long as possible. Thinking it would slow me down, but it's definitely been one of the best things. So Do you um when you start these new companies,'cause I always I always find this interesting. When you ever you have like a serial entrepreneur

1:03:02 Uh people have different approaches. So some people they They have their main thing and they leave and they say, I'm gonna go on a sabbatical basically for a year, figure out my next thing. Other people. They take some percentage of their time, they're devoting it to new ideas. And they go s they roll up their sleeves and they're super like on the ground figuring out the new idea. Other people, they recruit a operator.

1:03:23 And they just give the operator kind of like the idea, maybe a little bit of a plan, and then let the operator run. And they kind of are there as more of a chairman or a board member from afar. When you did like the diaper brand and these other ones, Were you Like boots on the ground, like every day figuring it out, or did you do the operator model? What what did you do? Definitely books on the ground. What I would say is in our business there's a through line through it all, right? We're essentially making a product whether it's a house, a bowl of shampoo.

1:03:48 A Laundry pot or uh Dot blaster. I mean It's essentially still making polite. Building factories, selling it into to retail. So

1:03:59 We've built such a big flywheel. Like if you look at our Shins in office, we have three and a half thousand people there, right? And it's such a big flywheel. That It just becomes easier and easier to plug into that firewheel, regardless of, you know, what category in. Yes, they're all different industries, but we're still effectively trying to make the best product in the world at the best price. We set ourselves the goal of making a product to zero dollars.

1:04:21 I know that's impossible, but that's our goal how do we make the proper zero dollars and how do we make it the best of the world? So there's a through line through it all. So Very much boots on the ground, I believe. you know, leadership has to be on the dance floor, have to have your hands dirty. That's where you get the most insights. And in our business now, I'm you know, I'm a huge believer in firing bullets. And failing fast. So I always say get an actionable insight. Where's an insight? Find an insight somewhere in the world. And an insight forms a bullet.

1:04:46 And a bullet is a minimal viable investment into testing something. And then if the bullet works, it's a cannonball and we invest and we build the recipe around that. And once the recipe's working, you can pull a lot more things into that recipe and build that recipe out. So our mindset around fast fail. We actually have what we call fast starts now in F M C so we're trying to build a minimal viable product. Test Quickly.

1:05:08 As fast as possible. And so we can really speed like speed of innovation is is probably the biggest thing for us and we're trying to test more things. In these categories. faster and learn what works and what doesn't,'cause in my experience, things either just like hit the ground and start working, or they don't.

1:05:24 And then we have a mindset around continuous improvement. So we call it two percent improvement a week. the power of compounding. I know two percent improvement a week is nothing you can measure. But that's the mindset, that's what we put into our DNA, and we always say to the team, we suck now. compared to where we'll be in the future. So we have this relentless mindset of being able to look back on ourselves a year ago and be like, We weren't even good then. And I think that compounding improvement is such a a big part of of what we do.

1:05:50 And then from You know, when I look at team members. I'm trying to People say they try and build talent density in their business. Yes, we try and build talent density, but for us we're trying to build like grit density. And I say when we hire we're looking for grit smarts and someone with a bar to action, like real doers, right? People that just like we fast bail, we go in, we do it.

1:06:08 We have the winner we learn. If it doesn't work, we're getting heaps of insights out of that on how to improve next time. So our mindset or our DNA. In the business works across. any of those verticals or categories of women, we have the same mindset and the same approach and the same

1:06:25 D and A as to how we Approach them. If you were interviewing me, how would you figure out if I have any grip? I I think actually like looking back at your history is it's kinda like we often find like people that really great competitive sports people and they really love the word and highly competitive. Like I wanna understand how competitive you are.

1:06:44 How much you really want something. And to be honest. It it it ca it can be really hard. Like we've built this loop process in our business. similar to the Amazon loop. So where, you know, half were hiring and looking at you know, whether you fit and can do the actual job.

1:07:02 The other half is really Do you align to our DNA? And so we have a loop, we have you know, eight people Yep, half of those people will interview or questions around, you know, our DNA and really trying to go deep on understanding if that person fits our DNA.

1:07:18 And so we're really trying to build out, you know. Not only have Talent density, but our grip density. But certainly it's something that I find is really important. All our best people have just incredible grit and incredible bias for action.

1:07:31 Sure they'll smile, but they just Get shit done. And you know, we decide something at a meeting and they're already kinda actioning it in that very moment. And that's kind of our our Our culture. It's kinda that saying as well, right? That

1:07:46 Lazy people work a little bit. And expect to be winning, whereas winners work as hard as they possibly can and worry That they're being too lazy. And I feel like that's super true, right? Like People that like work hard.

1:08:01 They're always worrying that they're not doing enough or they're they're being too lazy. And it's kinda those people that's kinda like the mindset we're we're we're we're looking for. Yeah, Elon has a good question he uses in interviews. He says, uh Uh tell me about he just start sits down and he just says, Tell me about the hardest problems you solved and how you did it. And

1:08:19 Yeah, you could Get so much from one question because W what's the hardest problem they solved? You know, it it will show you the the scope and the trust they had in prior roles. Like were they just nibbling on tiny little issues or were they actually like biting into really meaty things? Yeah, and like can they talk about the details, the path that didn't work, the path that did work because that's the person who was actually doing the work. There's so much like resume lying where somebody says, Oh, yeah, we did this. Like, cool. Tell me how you did it. They don't know because they weren't the one doing those parts of it.

1:08:50 Correct. Nick, this was awesome, and I really appreciate you coming on. I know you don't do a lot of podcasts, but Your story is is honestly incredible. I think As much as you're building in the factories, I think you can cre you doing it at podcasts like this. 10,000 new entrepreneurs with more grit with more resilience just by sharing the story.

1:09:08 Because You're showing, you know, what's possible, you're showing what you did, how it all turned out, and how you approached it. And so I think you know, a simple hour like this can do a lot for a lot of people. So I I really thank you for doing it. It was a lot of fun and uh yeah, I don't often sh share our story all that often, but Yeah, I totally agree. If it can help inspire.

1:09:28 Always say it, right? It's not really how capable you are, it's how willing You are. And I think it's the willing people wet.

1:09:37 stick at it for a long, consistent period of time and continually improve. that actually are the most successful. It's not necessarily about how smart you are really as just grit and perseverance and and you end up getting there. So I think that's the big lesson for any entrepreneurs out there really. Right on. All right, thank you so much.

1:09:56 That's a wrap. I feel like I could rule the world, I know I could be what I want to I put my all in it like my day's off On the roadless travel never looking back

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