Tecovas: Paul Hedrick

Western wear is having a moment – and so is the upstart Western brand Tecovas. Founder Paul Hedrick is a Texan who realized that cowboy boots were either too expensive or too cheap, so he decided to create a premium brand with an attainable price. He traveled repeatedly to the cowboy boot capital of the world – León, Mexico – to obsess over every detail, and later he expanded his DTC business to make a surprising bet on brick-and-mortar stores. Today, beyond boots, Tecovas sells jeans, shirts, dresses, hats, and bags, and this year, the company expects to do more than $300 million in sales. This episode was produced by Alex Cheng with music composed by Ramtin Arablouei. It was edited by Neva Grant with research help from Iman Maani. Our engineers were Patrick Murray and Robert Rodriguez. You can follow HIBT on X https://twitter.com/HowIBuiltThis & Instagram https://www.instagram.com/howibuiltthis, and email us at [email protected]. Sign up for Guy’s free newsletter at guyraz.com http://guyraz.com/ or on Substack. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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• 0:00Guy Raz?

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• 0:46Guy Raz?

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• 1:32Guy Raz?

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• 2:16Guy Raz?

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• 3:45Guy Raz?

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• 4:27Guy Raz?

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• 5:19Speaker 01

  I became pretty product-obsessed, so much so that actually when we launched, I actually flew to Mexico. The production run wasn't done yet. I think I flew there the first weekend of November, and I stayed there until I inspected every single pair. Personally, did everyone, and was rejecting a lot, and was-- I mean, it took weeks longer than expected. I was-- I stayed in Leon and--

• 5:44Guy Raz?

  How did you keep the factory owner from just really getting pissed off at you?

• 5:48Speaker 01

  Well, I don't think I did. I think they did get pissed off at me.

• 6:02Guy Raz?

  Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

• 6:13Guy Raz?

  I'm Guy Raz, and on the show today, how Paul Hedrick made a sketch of a cowboy boot in Microsoft Paint and turned that into Tecovas, now one of the most popular brands of western wear in the country.

• 6:31Guy Raz?

  Western wear is kind of having a moment. Actually, it's had a lot of moments. For decades, cowboy boots and denim have gone in and out of fashion. And it's not necessarily been driven by country singers. You've seen this stuff on actors, politicians, athletes, anyone who wants to add some swagger and maybe even an inch or two to their step. And right now, western wear seems like it's everywhere again, thanks in no small part to TV shows like Yellowstone and even Beyonce. Her Cowboy Carter Tour has reignited the trend. Her fans are showing up in boots and hats and fringe and rhinestones.

• 7:12Guy Raz?

  They're creating a whole new wave of western chic that's taken over arenas and Instagram feeds. And the numbers back this up. Sales of cowboy boots jumped 20% in the first two weeks after the release of Beyonce's country-themed album. Levi's and cowboy hats had a banner year last year, and so did the brand we're talking about today, Tecovas. About 10 years ago, long before cowboy boots were back in the spotlight, a guy named Paul Hedrick saw an opportunity. Paul didn't come from fashion. He wasn't a designer. He was just a guy who grew up in Texas, and he thought cowboy boots were either too expensive or too cheap. There wasn't much in between.

• 7:57Guy Raz?

  So Paul decided to create that in-between brand with Tecovas. And from the very beginning, he obsessed over every detail. He sketched the designs himself, he shaped the product line, he traveled to Leon, Mexico, where the boots are still made, to personally inspect each pair. Today, beyond just cowboy boots, the company sells jeans, shirts, dresses, belts, and bags. In this year, Tecovas expects to do more than $300 million in sales. And while much of their success started online, Paul made a surprising bet on brick and mortar stores. Tecovas now has more than 40 of these stores across the US.

• 8:39Guy Raz?

  Paul Hedrick was born in Houston in the late 1980s. When he was around seven, his family moved to Dallas, where his dad ran the local office for McKinsey Consulting. And perhaps unsurprisingly, Texas would become a big part of Paul's identity.

• 8:55Speaker 01

  There's like almost a responsibility that comes with being a Texan, of representing it, of being proud of it, of being friendly. It's one of the most recognizable state outlines, you know, one of the most recognizable shapes in the world. It's sort of just, it kind of comes with the territory. You feel like you were born into something that matters a bit more. You know, it could be a negative cycle, depending on how you view Texas. But I had actually mixed feelings about that. And I think a lot of people do. And I wanted to leave for at least a while. You know, I didn't even apply to any schools in Texas, for example, when it kind of came time to

• 9:40Speaker 01

  decide about college and whatnot. And so, yeah, I was always very proud of where I was from. I, you know, became a proud Dallasite, was a big Dallas sports fan. Growing up and it was nice having a sense of place.

• 9:55Guy Raz?

  Yeah, and I imagine you were probably a pretty good student. You went to Harvard for college in 2006. You studied economics and I guess after that you kind of followed in your dad's footsteps, which is you worked as a consultant at McKinsey for a spell and then you went to go work in private equity at a place called El Catterton.

• 10:12Speaker 01

  Yeah.

• 10:13Guy Raz?

  And I guess that that firm at El Catterton, that sort of was focused on investing in like consumer retail businesses, right?

• 10:21Speaker 01

  Yeah. So for context, I don't know how to put this, but when I was a kid, I was, I felt like I was destined to be in consumer. I love stuff. I loved cars. I liked gadgets. I, I subscribed to Architectural Digest and Rodent Track and Popular Science. I was always interested in, I mean, listen, I think I was interested in consumerism and didn't know how to, how to, how to put it. And so basically I got a call, a recruiting call to work at this firm, which at the time was still, I mean, it was, it had been around for a long time since, since 1989, I believe. But only in recent years had established its reputation as really like the consumer retail firm.

• 11:03Speaker 01

  And I became, I was sent to Chicago and where we had just made the firm's largest investment at the time. We had merged two candy businesses and we had to do a lot of post-merger work and.

• 11:16Guy Raz?

  And so you were involved in the operations side of that?

• 11:19Speaker 01

  Yeah, basically for about 18 out of my next 24 months, I kind of became sort of a chief of staff. And I sat at a desk at a candy company.

• 11:30Guy Raz?

  What were the businesses?

• 11:32Speaker 01

  They were called Farley's and Sather's and Ferrara Pan.

• 11:35Guy Raz?

  Sure.

• 11:36Speaker 01

  And they were merged together to become Ferrara Candy Company.

• 11:40Guy Raz?

  Got it. Yeah, I'm looking at that. I mean, they own, wow. So this is a company that has like massive, well-known brands, Sweet Tarts and Nerds and. Gobstoppers and Lemonheads and Jellybellies. I mean, so, I mean.

• 11:52Speaker 01

  So they've since grown a lot.

• 11:54Guy Raz?

  Now they got, yeah.

• 11:55Speaker 01

  It's a big candy conglomerate.

• 11:57Guy Raz?

  Roughly, what was the, what was the revenue of a company like that when you were, when you were doing consulting?

• 12:01Speaker 01

  Yeah, they were just under a billion.

• 12:03Guy Raz?

  God, it's amazing how you just take all these brands, because you think like, when is the last time, you know, I ate a Red Hot or a Lemonhead? But then, you know, you put these brands together and you're like, there's a lot of children in the world, in the United States, who eat this stuff.

• 12:18Speaker 01

  Man, guys, a lot of sugar and I don't really eat sugar anymore. So it's kind of funny that that's where I cut my teeth in many ways.

• 12:25Guy Raz?

  All right. So you, you end up working for Catterton for a couple of years and I guess you start to come to the conclusion that maybe it's time to go to business school. And so you apply to top business schools, Harvard, Stanford. What did you, did you apply to those business schools thinking like this will be sort of a transitional period to help me think about what I want to do next? Or did you kind of have an idea in mind of what you wanted to do?

• 12:51Speaker 01

  Well, I wrote an essay about what I wanted to do. It must've been really bad because I didn't even get an interview.

• 12:59Guy Raz?

  For either, either of the schools?

• 13:00Speaker 01

  For either school.

• 13:01Guy Raz?

  And what, what was the essay about?

• 13:04Speaker 01

  I actually wrote about how I wanted to start a sandwich restaurant. And I'm not sure I believed in it. I had actually thought about getting into the franchise business. But I honestly thought at the time that writing an essay about being a franchisee to get into one of those schools was not going to be good enough to get me in.

• 13:24Guy Raz?

  Yeah.

• 13:24Speaker 01

  And so I sort of changed the essay to, well, I'll start a sandwich company. And yeah, I mean, listen, my heart was not in it.

• 13:31Guy Raz?

  All right. So you don't get into the business schools. You don't even get an interview with either of these schools. And that must've stung a little bit, or maybe more than a little bit?

• 13:40Speaker 01

  It really stung. I hadn't even thought about a backup plan and I kind of believed, I had read somewhere about burning the bridges. And I think I knew in, in the back of my head that I needed to burn bridges to consolidate my choices. And so I had actually given up my lease in Manhattan to a friend. And so I was kind of homeless and that was sort of a forcing mechanism to start, to start to think about what was next.

• 14:06Guy Raz?

  That was the catalyst.

• 14:07Speaker 01

  Yeah, basically I went to a happy hour with one of my colleagues at Catterton. And man, I think we just had just enough beer to start to talk about, I think we asked a pretty naive question, which is, you know, how hard could it be?

• 14:23Guy Raz?

  To?

• 14:24Speaker 01

  To start one of these companies?

• 14:25Guy Raz?

  To start one of the companies like that you had worked on?

• 14:28Speaker 01

  Yeah, like a CPG brand.

• 14:30Guy Raz?

  Yeah.

• 14:30Speaker 01

  And I was always comparing myself to my colleagues at McKinsey and Catterton. And I think the one thing I noticed at first was that they were all really type A, hard workers, but a lot of them were working hard, not necessarily working smart. I also noticed I had a crazy risk tolerance compared to most of them. And then the third thing I noticed was I was creative and I, almost none of my colleagues at either of those firms had really had an interest in being creative. All of them were pretty gung ho about just business. And I, my decision ultimately became one about, hey, if I, if I'm starting a company, first of all, I can be creative. Basically, every decision can be a creative one.

• 15:10Guy Raz?

  So you've been brainstorming in your head at least about, I don't know, like what, what other ideas were you thinking about? Restaurants?

• 15:17Speaker 01

  Yeah, I went down the rabbit hole of beverage company, specifically a coffee company, was planning to start the first canned cold brew coffee beverage company, which at the time would have been fairly innovative.

• 15:30Guy Raz?

  Yeah.

• 15:31Speaker 01

  I kind of put my consulting hat on and I thought about idea archetypes. You know, I kind of had a Warby Parker for X, Airbnb for X, and then a few other, you know, more esoteric ideas and, you know, we, Airbnb for storage, for example. Actually, the one that I got very close to doing was coffins.

• 15:49Guy Raz?

  Hmm.

• 15:50Speaker 01

  And.

• 15:51Guy Raz?

  Making and selling coffins?

• 15:53Speaker 01

  Yeah, basically there was, I had realized that there was one public company that controlled the vast majority of both the production and the, and the sale of coffins. And it was through this crazy funeral home network. Anyway, Cowboy Boots was actually the first idea I had.

• 16:10Guy Raz?

  Right.

• 16:11Speaker 01

  And almost the entire process between like March and July, I was almost trying to convince myself not to do it because it was the first idea. I was like, there's no way my first idea can be the right one. You know, it's going to be perceived as a niche category. I kept thinking of reasons not to do it.

• 16:29Guy Raz?

  Yeah. I want to go back to cowboy boots in a sec, but on the coffins idea, because that's actually a great idea, right? Like, it makes me think of Warby Parker, you know, like Luxottica controlled the glasses industry, that, you know, whether it was Ray-Bans or whatever, they, they, they owned tons of brands. And Warby Parker's premise was, well, glasses don't have to be so expensive. There's no reason why they're, it's just artificially inflated. I imagine it's the same with coffins. I imagine the margins on coffins are incredible because when someone dies, oftentimes, there's money left, right? And so, the whole funeral industry knows that. And not to say that they're necessarily exploiting it, but oftentimes,

• 17:11Guy Raz?

  there's money to pay for the funeral and, you know, the cremation or, or the burial and the coffin. And, you know, it can run 20, 30, $40,000 or more, depending on how it's done. And so, it would be really interesting to try and get into that business, right? The coffin business is morbid, but, I mean, it is an interesting idea.

• 17:32Speaker 01

  You know, it's funny. You're right. It turns out at the time, the death industry was about 16 billion. I believe coffins were over a third of that.

• 17:42Guy Raz?

  God. It's those boring things that no one thinks about.

• 17:45Speaker 01

  Totally.

• 17:46Guy Raz?

  I'm looking at this now. Matthews and Batesville Casket are the two largest companies in the industry. So-

• 17:52Speaker 01

  Yeah, Batesfield was the one that I was talking about.

• 17:54Guy Raz?

  And I'm sure they want to protect their moat. So, anybody listening who starts a coffin business, don't say, "I gave you that idea." I don't want Batesville to come after me. They'll know where to bury me.

• 18:03Speaker 01

  Well, here's the thing about coffins, too. It's, it's a secularly declining industry now that everyone's getting cremated. So, it wouldn't have been necessarily a growth category.

• 18:11Guy Raz?

  Well, maybe urns. Maybe like, you can take on the urn business or something, you know what I mean? Like-

• 18:16Speaker 01

  Yeah.

• 18:17Guy Raz?

  All right. So, you, so you're kind of brainstorming. And, and let's just get to cowboy boots for a second, because, you know, there's a cliche, and I, everyone listening who's ever worked with a Texan has experiences. That guy comes into the office with his Texas cowboy boots, and, you know, kind of swaggering in. Not to say I'm, I'm hostile to this. I love Texas, but we've all experienced this. Who, people who've worked with Texans, like, in London, or Seattle, or wherever, like, that guy is coming in with his cowboy boots. And you were that guy at the office in Connecticut.

• 18:53Speaker 01

  I was.

• 18:57Speaker 01

  I was, but I was also, I was homesick. I always felt when I left Texas, I was more magnetically drawn back to it, even if almost I didn't want to be. And I just kind of viewed that as a universal signal. So yeah, I started wearing, I was wearing boots as a kid, like any good Texan. You know, I probably had some good, some red Justin Ropers. And then in college, I started wearing them again towards the end because I really just, I was tired of trying to blend in and I wanted to kind of live more of my true identity. And so started wearing some boots then. And then in New York, yeah, I was wearing them.

• 19:36Guy Raz?

  Yeah, this is 2014. And this is an idea that comes to you like, oh, cowboy boots. Maybe there's something to cowboy boots, but you kept moving away from it because you felt like it wasn't a big enough opportunity.

• 19:48Speaker 01

  I think I was just judgmental of it because I knew what people would say. And a lot of people would have the reaction, honestly, that you're having, which is like, it feels like a niche thing. It feels like only some people wear them.

• 20:01Guy Raz?

  Yeah.

• 20:02Speaker 01

  Actually, my aha moment was, wait, I'm seeing what the coastal elite, if you will, think about this category.

• 20:10Guy Raz?

  Yeah.

• 20:11Speaker 01

  It feels like all the people in New York and LA and SF are sort of making the decisions around what the media and what the public perception of this category is. And I feel pretty confident that, that we can build a big business here.

• 20:25Guy Raz?

  But you were living in New York. So what got you to sort of say, you know what? Actually, I think that consensus is wrong. I think there is an opportunity in boots.

• 20:33Speaker 01

  Yeah, first thing was a little bit of data that I had. I was able to pull up an old, I think, private equity due diligence report on one of the retailers.

• 20:43Guy Raz?

  A retailer that, that does boots?

• 20:46Speaker 01

  Yeah, they quoted the US boot cowboy boot industry at three billion or more. And I don't know what I thought it was, but that was, I don't know, at least five, if not 10 times bigger than I thought it was.

• 20:56Guy Raz?

  Yeah, now you're getting, now you're getting closer to casket numbers.

• 20:59Speaker 01

  Yeah.

• 21:00Guy Raz?

  But you saw that there was an opportunity there and you thought there's something to this.

• 21:06Speaker 01

  It was basically two major realizations. One, it's bigger than a bread box. And then two, and this was betting on my own intuition for sure, but it was, there was a brand missing. The real thing that I noticed was I don't think there's a brand out there that's set up for this next 10, 20 years of growth. The last brand that was started was started 20 plus years prior. The brand before that was probably started 20 plus years prior, if not 50. And then there's got some 100, 150 year old brands out there.

• 21:35Guy Raz?

  Yep.

• 21:35Speaker 01

  And to be clear, there were a lot of other dynamics with the category that were interesting. It was super behind in marketplace development, very low online penetration. It was very wholesale oriented and not very attuned to the consumer. The challenge was everything in between sort of the sub $200 and greater than $500 sort of entry point. It just kind of felt a little dusty and it kind of felt like none of them were created for me.

• 22:04Guy Raz?

  Yeah. The thing that is interesting is that this is a time, 2014, where there's going to be an explosion of brands that were going for that mid-range, right? The Warby Parker, like, oh, it's not going to be an LVMH pair of glasses, or it's not going to be LensCrafters, but it's going to be somewhere in between, sort of bordering, affluent, but approachable and affordable. Away suitcases, very similar kind of, you know, going for that middle market. I mean, Kate Spade handbags kind of really started this in the 90s. And this is a version of that. You're saying, all right, we're not going to be like an LVMH, you know, level $2,000 pair of boots, or even $1,000, and we're not going to be the ones you might get at Target or Walmart that are 50 bucks.

• 22:49Guy Raz?

  It's going to be like $200, $300. That is, you know, high quality, but attainable.

• 22:55Speaker 01

  That is where the orientation began as to what might give this brand a reason to exist, which was, can I take everything that I would ever want in the product? And I wanted the high-end product, to be clear. So my goal was really to have it all, was to say yes to everything and then use a business model that a lot of these other brands and other categories were using to theoretically charge a price that might be lower than the luxury price, if you will.

• 23:24Guy Raz?

  Right.

• 23:24Speaker 01

  Because the luxury price also had markups built into it.

• 23:27Guy Raz?

  Right. Design and branding.

• 23:29Speaker 01

  That were well beyond, I think, what you needed to charge.

• 23:33Guy Raz?

  But I'm curious, because this is the summer of 2014. And you're thinking about this cowboy boot concept, right? And you're going to move to Texas, you're going to move back to Texas, not to Dallas, but to Austin. And you probably made pretty good money as a consultant for four years and probably saved quite a bit of it. So how much money did you have, just to start out with?

• 23:57Speaker 01

  I had about a hundred thousand dollars.

• 24:00Guy Raz?

  Right. And so with that money, what was your first move? Like, what did you do?

• 24:05Speaker 01

  I made a long checklist of all the things, I kind of worked backwards from a launch date, which I ended up grossly missing by probably six months. But anyway, sourcing was really the, by far, the most important thing.

• 24:18Guy Raz?

  Yeah.

• 24:19Speaker 01

  I eventually found out everything was made in Leo, in Mexico.

• 24:22Guy Raz?

  Yeah, how did you find that out, by the way? Just by Googling it?

• 24:24Speaker 01

  No, I cold called a bunch of custom bootmakers. Man, I found an article that was print only, but had been archived on a Texas Monthly's website. And it had the names and numbers of a lot of Texas custom bootmakers. I called a lot of those numbers and the lines were not, this is probably a 20-year-old, 15-year-old article, maybe 20.

• 24:47Guy Raz?

  Right. So the lines were probably no longer in business, or?

• 24:49Speaker 01

  Yeah. Well, unfortunately, I think most of them had passed away.

• 24:52Guy Raz?

  Right.

• 24:53Speaker 01

  But the few that did pick up, you know, all but one of them basically told me to pound sand and...

• 25:00Guy Raz?

  What were you asking them?

• 25:01Speaker 01

  I was very honest with them. I said, "Hey, I'm not going to compete with you. I'm a 26-year-old entrepreneur. I'm starting a cowboy boot brand that's going to sort of disrupt the market. We're going to sell direct to consumer. We're going to create really high-quality boots and it'll be not a custom brand at all. And do you have any advice for me?"

• 25:22Guy Raz?

  Yeah.

• 25:23Speaker 01

  "Do you have any bone in your body that wants to help an earnest young man?"

• 25:28Guy Raz?

  And did any of them say yes?

• 25:30Speaker 01

  Yeah, one guy did. He wasn't a custom bootmaker. He was actually an executive at one of the boot brands that was reasonably big.

• 25:40Speaker 01

  And I don't know, he just kinda took a, he had a soft spot and you know, he said, I'm gonna do you a favor. There's really only one place to go. It's Leon, Mexico. It's where all the welted western boots are made, really. And here's this one guy's name. He'd be my first call. And if he picks up, he'd be a great guy to at least show you the ropes.

• 26:00Guy Raz?

  Got it. Okay. So you, and how was your Spanish, by the way?

• 26:03Speaker 01

  Luckily, I was, I was fluent in high school and I became fluent again.

• 26:09Guy Raz?

  Yeah.

• 26:09Speaker 01

  In the year after that.

• 26:11Guy Raz?

  But you had good enough Spanish to kind of at least go down there. So, so he mentions Leon. So you decide that you're gonna go down there. And what was your, what was the goal? Did you, you had some appointments lined up?

• 26:23Speaker 01

  Yeah. So I had only gotten one name, one email of one factory owner. And he said, sure, I'll meet with you on this day, if you can come down. And that was it. I created a PowerPoint deck, met with him. I don't think the deck was opened. Maybe I flipped to a page and it was kinda like, I don't, you just need to talk to me face to face. And, you know, I realized later, there was no chance that he was gonna work with me. I look in the factory and the brands that I really wanted to compete most directly with had banners on the wall.

• 27:02Guy Raz?

  Yeah.

• 27:02Speaker 01

  And, and by the way, now that factory is, not to ruin the story, but he, a few, a couple of years later, he became our primary factory.

• 27:13Guy Raz?

  Right. But you get there and you realize you, this is not gonna, first of all, imagine that the minimum order wasn't something you could fulfill.

• 27:20Speaker 01

  You know, we didn't even get there with him. He basically told me, you know, I like my clients. I've got, I think he had clients that were making over a thousand boots a day contractually. And it was just, you know, it doesn't need to take any risks. He said, but I know a guy across the street, but I really wanted to work with him. In fact, I spent the rest of the fall trying to convince him to work with me until December. Man, it was hard because I kinda thought that, you know, someone will work with me. It's no big deal. And I got to the point where I was sort of desperately needing to work with someone to get something started.

• 27:52Guy Raz?

  What's not clear to me is if you went down there, right? And if you saw that all of these other brands were already making boots down there.

• 28:00Guy Raz?

  At that point, didn't you, I mean, you must have asked yourself, well, how am I going to make my thing different? Because originally, you were looking at this as like an opportunity to hit a middle market, right? Something that was high quality, but cheaper than a thousand dollars or six hundred dollars. But if other brands were already making their boots in these factories, surely they were already offering quality boots at a competitive price. So how are you going to differentiate your product?

• 28:28Speaker 01

  I mean, listen, the D to C myth is that you can, you skip the wholesale markup, and you can charge a lower price. You know, the reality is the increase in marketing costs, the increase in G and A that you have to have to operate both as a retailer and a brand. It's a very costly game. And so I would say that was the plan, which was to basically say, we're not going to wholesale the boots. And so we've got theoretically a little bit more margin to play with.

• 28:56Guy Raz?

  Right. Oh, a lot of these brands were wholesaling. They were selling at department stores.

• 28:59Speaker 01

  Every brand was wholesaling.

• 29:00Guy Raz?

  Yeah. Because that's the big business, obviously. It's like Nike, that's their business.

• 29:03Speaker 01

  Yeah, mostly selling to independents and big box western.

• 29:07Guy Raz?

  Yeah.

• 29:07Speaker 01

  But the other real thing was, I really want this boot to be everyone's favorite boot. And I want this brand to be everyone's favorite brand. And so I had already started to make a long list of the things that, you know, we were going to offer the consumer. And so what ended up coming out was a couple of things. One, the product was going to be better. And there were just a few notable minor improvements we needed to make to make the product, in my opinion, significantly better than the competition. And it all came down to comfort. Most of the high end brands used pretty stiff leathers and what's called the vamp and the counter, you know, basically the part that wraps your foot. And I remember asking the factory owners and the tannery owners, like, hey, why, why

• 29:52Speaker 01

  are people doing this? And they're like, well, in Mexico, you know, people don't like the boots to droop. And so they always make them stiff. And so we always tell people to make them stiff here.

• 30:01Guy Raz?

  You wanted softer leather.

• 30:03Speaker 01

  Yeah. And I was like, well, can we make it softer? They're like, oh, yeah, if you want. Like, all right, well, let's do that. And then the second thing was, most of the higher end brands that use really Old school construction techniques were not comfortable underfoot. They would stick a big, basically natural, untanned leather midsole. And I said, well, why don't we just add a little bit of cushion under there as well? And so those are the two innovations that differentiated us from all the high end brands. And then the other big thing we did was, and this is where my sort of northeast experience with other people reacting to this industry came in handy. Was I kind of felt like the category needed to be demystified a little bit.

• 30:45Guy Raz?

  Yep.

• 30:46Speaker 01

  You know, the only shopping experience really available at the time for cowboy boots was not only in a physical retail store, there wasn't much online. But you're, you're walking down basically that grocery store aisle of boots that are arranged by size. And there's a hundred different kinds of boots that all look different from each other that are a hundred to a thousand dollars with almost no rhyme or reason. And it can be overwhelming. You almost feel like you need a Sherpa to walk you through it. And I said, why don't we simplify this for people? And I, in my research, was effectively going to these stores and then asking the associate, hey, tell me your best selling, high quality boot you have.

• 31:29Guy Raz?

  Yeah.

• 31:30Speaker 01

  And they always pulled something off the shelf that, it was so refreshing. It was always this simple brown, beautiful, sort of understated details, high quality leather, no frill, you can kind of, it felt versatile. It felt like something you could wear with jeans or slacks. And like, yo, this is really the one that sells. And then I look at the shelf, I'm like, well, why? Why isn't that more obvious? And can I distill that for the consumer?

• 31:58Guy Raz?

  Yeah. All right. I wanted to stick to Leon for a moment. You, you end up having to work with this other factory that's across the street from the one you want to work with. I'm assuming this other factory is smaller, probably doesn't have the same capacity. When you start to talk to this factory, you're not a designer. How does it work? Do they have like lookbooks where you just like pick different parts of what you, how you want it to look and you put it together?

• 32:25Speaker 01

  Well, remember, I, I wanted to go as to be my creative endeavor. And so, right. So, yeah, no, I designed the, the boots. I did draw it with my hand, but then it, then I needed to send an email and I couldn't get a good picture of what I was drawing. And so I went into Microsoft Paint and I figured out that there's a function where you could kind of make a line and then click to the right and the line would kind of swoop and turn into a curve.

• 32:52Guy Raz?

  And right.

• 32:53Speaker 01

  Basically use that to try to match my drawing. And so, yeah, the first boots were designed in Microsoft Paint.

• 33:01Guy Raz?

  When we come back in just a moment, how Paul becomes the client from hell when dealing with his Mexican manufacturer and how he chooses a name for his brand that at first he doesn't even like. Stay with us. I'm Guy Raz and you're listening to How I Built This.

• 33:27Guy Raz?

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• 34:09Guy Raz?

  The agents bring speed and scale and people bring taste, judgment and control. Learn how you can get more out of your site from a Framer specialist or get started building for free today at framer.com/built for 30% off a Framer Pro annual plan. That's framer.com/built. Rules and restrictions may apply. AI isn't just opening new business opportunities, it's changing the way businesses get work done. The questions they ask, the decisions they make, the routine tasks they can hand off. That's the idea behind NetSuite Next, the next generation of NetSuite with AI woven into the tools your business already relies on.

• 34:54Guy Raz?

  NetSuite Next surfaces insights exactly when you need them, puts agents to work on routine tasks and problems, and lets you ask complex questions in plain language, like talking to a knowledgeable colleague. But technology is only part of the story. AI is also reshaping how people and teams work together, and that shift is already underway. That's why NetSuite wants to put a new expert-created business guide in your hands today. It's called Aligning for the Agentic Era: How AI is Changing Everyday Work. And right now, it's yours, absolutely free. Inside, you'll discover how AI could reshape work across your entire organization, and how to position your business to prosper from it.

• 35:39Guy Raz?

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• 35:58Speaker 02

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• 36:43Speaker 03

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• 37:04Guy Raz?

  Hey, welcome back to How I Built This. I'm Guy Raz. So it's late 2014 and Paul is trying to place an order with a factory in Leon, Mexico, to make his cowboy boots, but he only has $100,000 to work with. So...

• 37:20Speaker 01

  We negotiated. I tried to get the minimum order quantity as low as I could.

• 37:24Guy Raz?

  And what was their minimum? How many did you have to order?

• 37:26Speaker 01

  2,000 pairs.

• 37:28Guy Raz?

  And you were gonna price them at like, what was your retail price gonna be?

• 37:31Speaker 01

  $195 to $235.

• 37:34Guy Raz?

  Got it. Okay. So basically, you're looking at, what? I mean, your price...

• 37:41Speaker 01

  It was about a $200,000 minimum.

• 37:44Guy Raz?

  Right. You had 100 grand. So you were gonna have to get pre-orders or some, or get some good payment terms or raise money. But it was more than you had. I mean, you were gonna have to spend about 200 grand on these. But, and what was the timeframe? I mean, did you, again, like, at that point, did you like, put a deposit down and say, "Okay, here's the first 30 grand. Let's go. Let's start."

• 38:05Speaker 01

  Yeah. At this point, so much time. I had wasted so much time trying to get the other factory on board. And we're well into the spring. You know, my funds are dwindling. We get all the way into the summer. But it got so bad that actually, I got handed off to the factory next door to the one that I had originally worked with because they were busy with their other orders. So I'm on factory number three. You know, I basically had to start development fresh with them. And I had negotiated to spread out the minimum as much as I could. I said, "How long can I spread it out?" And they said, "Four months." And I said, "Okay." Well, in my head, I'm like, "Well, yeah, I'm obviously gonna run out of money. But if I launch the brand, I'll get revenue coming in. And I don't have

• 38:48Speaker 01

  any other costs. So the revenue should be just enough to pay for the, yeah, the rough math should work. I should be okay."

• 38:57Guy Raz?

  Okay. Well, we're gonna get there in a sec. But you have a plan. And, by the way, did you have a name yet? Was it called Tecovas already or not yet?

• 39:06Speaker 01

  I believe we picked the name in December or January. I had hired a branding agency that fall.

• 39:12Guy Raz?

  But how much did that cost you?

• 39:14Speaker 01

  All in on branding and inclusive of basic web design, I think I paid $15,000 or $17,000 and then included...

• 39:25Guy Raz?

  Oh, so that's a bargain.

• 39:27Speaker 01

  Yeah. I mean, I was not going to the New York agencies.

• 39:29Guy Raz?

  No.

• 39:31Guy Raz?

  So how did you come up with the name Tecovas? Because Tecovas, I think it's like a geological formation or something. What, tell me what it is.

• 39:38Speaker 01

  Man, coming up with a name for any brand is so frustrating because it all starts with a lawyer. Or at least it ends with a lawyer. And nothing's available. And I had a few names that I wanted to use that weren't available. The Tecovas name came from a brainstorming exercise. We actually found a friend of the agency was a graduate student at Texas. I think majoring in linguistics. I don't even remember. And they kind of used him as a contractor every now and then for naming. And I said, I want it to be a Texas based name and I want it to come from something real. And he basically came up with a list of 10.

• 40:20Speaker 01

  And, you know, we'd been told by the lawyers to pick something relatively obscure. And we kind of picked the most obscure one, honestly. But it felt right to them. I would say I didn't really like it at first, to be honest.

• 40:35Guy Raz?

  You didn't like Tecovas?

• 40:36Speaker 01

  I wish I had the vision to say I did.

• 40:39Guy Raz?

  And what is it? It is a geological site?

• 40:41Speaker 01

  Yeah, it's basically a rock formation within the Paladuro Canyon, which is basically only geologists have probably ever even heard of that word.

• 40:50Guy Raz?

  So you could get, you could use it?

• 40:52Speaker 01

  Yeah, it was basically obscure enough for us to own. It felt right to me after a while. It kind of the first two letters and the last two letters were the same as Texas. It felt both masculine and feminine. It kind of felt plural and singular. It kind of sounds like a Spanish word. I'll think it actually derives from a Native American word. And so, yeah, just a lot of signs pointed toward the name being right.

• 41:19Guy Raz?

  All right, so you have a name, but you're, you're blowing through your cash, your savings, right? You had a hundred grand that you brought with you. But now you needed more money. You needed more money to pay for all this stuff, right? All these orders. So what did you do?

• 41:37Speaker 01

  Yeah, the well wasn't going to run dry until the fall of 15. And that was really when all the major operational costs were starting to add up.

• 41:44Guy Raz?

  Yeah.

• 41:45Speaker 01

  And it became pretty clear, it was, it became blindingly obvious that I was going to run out of money. And so I really had this miles, I wanted to get to launch. I wanted to say I bootstrapped this brand to launch and then I went, you know, and raised capital for it. So I got comfortable with the idea of raising capital that year for sure. I mean, every other brand in the universe was raising seed rounds, pre-seed rounds.

• 42:10Guy Raz?

  But you knew you could get through that first year on what you had.

• 42:13Speaker 01

  Yeah, I got through the pre-launch year and I did. I got through the pre-launch year and basically September I started running. Well, here's the other thing, I cashed up my 401k, so that was not included in that original number. You take a big tax penalty on that.

• 42:27Guy Raz?

  Yeah, but you were in your twenties. I mean, it's, you know.

• 42:29Speaker 01

  Yeah.

• 42:29Guy Raz?

  It's not that risky. I mean, it's not the best idea, but it's not, but you can recover from that.

• 42:34Speaker 01

  It's not, but man, I mean, I extended every runway I could, even though like you point out, I, yeah, I certainly certainly had the ability to raise capital. Just I had, I don't know, I was prideful. I didn't want to, I wanted to get to a certain point. I probably took on $30,000 of credit card debt. I don't think I even erased for three years.

• 42:53Guy Raz?

  Yeah.

• 42:54Speaker 01

  I mean, my credit score was in shambles until a few years ago.

• 42:58Guy Raz?

  And tell me what you were doing on a day-to-day basis between the time you visit Lyon and when you launch, right? In 20, we're going to get to how you do this in 2015, but like on a day-to-day basis, I have to imagine you're working both trying to work smart, but probably working very long hours. What are you doing every day?

• 43:16Speaker 01

  To be honest, I don't think the hours were long because there's, there's just not a lot to do. There's no company that's operating. There's no customer service emails. There's no orders to be placed. It's a lot of hurrying up and waiting and I think I totally underestimated the product of the design and product development lifecycle and how long that would take.

• 43:36Guy Raz?

  Why did that take so long? Was it going back and forth with like emails or?

• 43:40Speaker 01

  Because I had never done it before and I was the most annoying client you could possibly have.

• 43:46Guy Raz?

  Cause you get, they'd make a prototype and you were like, ah, no, it's not right.

• 43:50Speaker 01

  Yeah, basically today, the way things work is, you know, you agree to a certain number of prototype reviews, you know, usually two, maybe three.

• 43:59Guy Raz?

  Yeah.

• 43:59Speaker 01

  And I was a perfectionist too. I mean, we probably went through 10. I remember going to them on day one and saying, I am not designing to an FOB cost here, a cost here. I'm, I am designing for the end product to be perfect. And then you just tell me how much it costs and I'm going to go price it, you know, the way I need to price it.

• 44:20Guy Raz?

  In other words, they were used to doing it as cheaply as possible, assuming that the customer was going to then sell it to wholesale, was going to wholesale it and then the retailer would mark it up again.

• 44:31Speaker 01

  So. Yes, they were used to the, to the brand saying, it can't be more than $80 because we're going to multiply that by four and retail for 320, 325.

• 44:40Guy Raz?

  And you were basically saying, look, you know, you can spend more money because I'm going to be sending, selling this direct through my website. So if I make a 30 or 40% margin on this, we're, you know, we're in great shape. But that meant that they could spend more money on the prototype.

• 44:55Speaker 01

  Yeah, the challenge was I was asking them to spend money on things they don't normally spend money on, like quality control and extra training and all this. It would basically was always going to be a, you know, to work with Tecovas as a client, I wanted to shift the paradigm with these factories. I wanted to shift away from where do we cut corners? Where can we save money on, you know, some small material thing? And how do we invest in the quality?

• 45:19Guy Raz?

  Yeah. Okay, so you're going back and forth and back and forth. And in the meantime, it's a waiting game because you want to launch this thing. And how long does it take to make a prototype? Like two weeks?

• 45:31Speaker 01

  Yeah, two weeks is a pretty typical cycle.

• 45:33Guy Raz?

  Okay, you look at it, you fly down there and you get there and you're like, no, it's not there, not good enough yet.

• 45:40Speaker 01

  Yeah, that happened more times than I can count. And then it happened again because we had to switch the factories kind of last minute.

• 45:47Guy Raz?

  How were you keeping up your spirits that this was going to work, that people would actually buy them? What gave you the confidence?

• 45:54Speaker 01

  It was a very humbling year, I will say. I remember my college roommates kind of asking me for updates and, you know, they're like, oh, you quit your job in private equity to start a boot store, you know, how's it going? And, and yeah, I ate a lot of humble pie. And so I think by setting that baseline all the way down and knowing that, no, I'm, I'm like going all the way to the bottom. I'm going to zero, I'm going to negative.

• 46:22Guy Raz?

  You're like Drake, you start from the bottom.

• 46:26Speaker 01

  Yeah, maybe.

• 46:27Guy Raz?

  Well, no, not exactly, but I hear you. Yeah, because you, okay, you go to this prestigious university and all your friends are in finance and are going to business school and you're like in Austin, making, trying to make cowboy boots.

• 46:41Speaker 01

  Listen, I was talking to a lot of people about going to market and getting ideas for how to launch and I ended up actually, I believe you've, have the Harry's guys been on this?

• 46:51Guy Raz?

  Yep.

• 46:52Speaker 01

  Yeah, well, you have friends with Jeff.

• 46:54Guy Raz?

  With Jeff Rader.

• 46:55Speaker 01

  Now I am, but I didn't know him back then, but I had seen their launch playbook and they had created this, actually this open source email gathering tool that I think they had gathered like 100,000 emails for before they launched. And so I found the code for it and put Tecovas on it. And, you know, that was just one of the many things we did. Unfortunately, unlike the 100,000 emails, I think I got 2,000, but.

• 47:19Guy Raz?

  That's not bad.

• 47:20Speaker 01

  You know, I think I launched with, you know, we launched with 5,000 emails. But yeah, I was basically just spending that whole six months of the last development time grasping at straws, finding every single thing I could put into the bucket of how do I make sure on day one that this thing, I'm not launching to crickets.

• 47:37Guy Raz?

  Yeah. And are you already by the summer of 2015, letting people in, put in pre-orders?

• 47:44Speaker 01

  No. I had this almost illogical aversion to pre-orders because I wanted the whole experience of Tecovas to always be fast and free and amazing. And so I didn't want to subject the consumer to uncertainty, which, you know, was probably stupid for my.

• 48:05Guy Raz?

  Yeah, I mean, that's counter, it's like a very opposite way to how most D to C companies start. They start with pre-orders and there's usually this uncomfortable waiting period and then people get mad, but then it all works out. But by the way, did the website look good by the way, or was it kind of janky?

• 48:22Speaker 01

  You know, Shopify was kind of getting off the ground and they had these beautiful templates. And, you know, I was very thoughtful about the storytelling.

• 48:32Guy Raz?

  What was the storytelling?

• 48:33Speaker 01

  Basically, I had a page about how the boots were made and told the story of Leon. We were really the first brand to kind of tell the story of Mexico and Leon in particular.

• 48:44Guy Raz?

  Do you think a lot of brands tried to not talk about Mexico because they didn't want people to know they weren't made in the US?

• 48:50Speaker 01

  A hundred percent.

• 48:51Guy Raz?

  But you flipped that script and you were like, no, actually, this is really where they're made. This is a proud heritage.

• 48:56Speaker 01

  Yep. I hired a really good photographer, videographer, to come with me down to Mexico to show nice lifestyle photography of the boots being made, of the artisans who are making them. I even created a bunch of shirts for them to wear, but we only had like six of them. And so we would, we would take them off the guy who was finished with this step and put it on the guy who was finishing the next.

• 49:19Guy Raz?

  Oh, you had like shirts made, like what kind of shirts?

• 49:21Speaker 01

  They were little green, kind of Carhartt sort of work shirts.

• 49:24Guy Raz?

  Yeah.

• 49:25Speaker 01

  They had a Tecovas embroidery on it.

• 49:27Guy Raz?

  Oh, wow. You had the guys in the factory wearing, oh, wow. That's so smart. So it looks like.

• 49:32Speaker 01

  Kind of faked it a little bit.

• 49:33Guy Raz?

  You know what reminds me? My brother-in-law, when he started his business, he called himself account executive. So, because he was young, he was a young guy. So he was the owner, he was the only employee, but he called himself account executive on his business card. So when he'd show up, people would be like, oh, you must work for a big company. He's an account executive.

• 49:51Speaker 01

  By the way, I made business cards. I made very nice business cards. And I remember putting CEO on the business card and my dad, I getting, giving one to my dad and he just laughed at me. I'm like, why are you laughing? I am the CEO. He's like, yeah, you're also the only employee.

• 50:10Guy Raz?

  You're the only employee. Yeah. I actually think it's better to put account executive on your business card here at the Solothurn. Anyway, now you were, you launched a website in the fall, I guess, of 2015. And you're so small that you're probably under the radar. Like, none of these competitors even noticed you at this point.

• 50:28Speaker 01

  Oh, yeah. I don't think any of them. Well, it was a very small universe, I will say. It's an industry where everyone kind of knows each other. I'm sure there was chatter. You know, here's the thing that we were never a part of the conversations that really happened the most, which is between retailer and

• 50:43Guy Raz?

  Yeah.

• 50:44Speaker 01

  and brand. We weren't going to the trade shows. I showed up to one of them and realized like, this is not our place. We're not going to be doing this kind of business for a long time.

• 50:52Guy Raz?

  You were not going to be talking to Neiman Marcus or Bloomingdale's. You were going to focus on selling through your website.

• 50:57Speaker 01

  Yeah.

• 50:58Guy Raz?

  Okay, so you launch officially in October of 2015?

• 51:05Speaker 01

  October 27th was the date.

• 51:07Guy Raz?

  And you were going to go in with two styles, right? Two for men, two for women, and that was it?

• 51:11Speaker 01

  Yeah, two for men, two for women, two colors each.

• 51:14Guy Raz?

  The Cartwright and the Earl, I think, were the men's, and they're still very popular boots that you sell, right?

• 51:20Speaker 01

  Yep, still two of our, you know, four bestsellers.

• 51:23Guy Raz?

  And then the women's were the Jamie and the Penny?

• 51:26Speaker 01

  Yeah, the Jamie and the Penny, both named after dogs that I, former pets.

• 51:33Guy Raz?

  Okay, so you, and who, you know, you launched on the 27th of October 2015, and who, like, was it your friends who were ordering that day?

• 51:43Speaker 01

  Yeah, turned it on, sent four or 5,000 emails out, and had $20,000 of sales in the first day. So about 100, you know, 80 to 100 pairs, I forget.

• 51:53Guy Raz?

  That's pretty good. How much of that was coming from relatives?

• 51:57Speaker 01

  It was about half. So, uh, not relatives, but friends and family.

• 52:03Guy Raz?

  Yeah.

• 52:04Speaker 01

  People that I knew directly, who were probably a Gmail contact.

• 52:07Guy Raz?

  And you were paying roughly, let's just say roughly half of that to make them, but then you also had to pay shipping costs. And so roughly, like, at that time?

• 52:16Speaker 01

  They were probably 40% gross margin.

• 52:19Guy Raz?

  That's pretty good.

• 52:20Speaker 01

  Yep.

• 52:21Guy Raz?

  I mean, it also speaks to the perception around cowboy boots, right? It's not like, I don't know, what's something that people just assume should always be cheap, like bottled water, right?

• 52:32Speaker 01

  Yeah, commodity.

• 52:33Guy Raz?

  A commodity, right? But cowboy boots, I think people just go into that experience assuming this is going to be more expensive.

• 52:41Speaker 01

  That was by far the biggest reaction we got from people who were in the industry. And in many ways, by the way, being online only kind of worked against us because, I mean, boots are a sensory thing, the way they feel.

• 52:54Guy Raz?

  You want to feel it.

• 52:55Speaker 01

  They smell that, oh, my gosh.

• 52:57Guy Raz?

  Yeah.

• 52:58Speaker 01

  You can see the sheen, you can, you know, the details up front. It's what's hard to photograph. So I was, I became pretty product obsessed, so much so that actually when we launched, I actually flew to Mexico. The, the production run wasn't done yet. I think I flew there the first weekend of November and I stayed there until I inspected every single pair. I, you know, personally did everyone and was rejecting a lot and was, I mean, it took weeks longer than expected. I was, I stayed in, I stayed in Leon and.

• 53:30Guy Raz?

  How did you keep the, the factory owner from just really getting pissed off at you? Like you'd go there, you were looking at the boots, you're like, no, this isn't good enough.

• 53:38Speaker 01

  Well, I don't think I did. I think they did get pissed off at me.

• 53:42Guy Raz?

  Yeah. They're like, you're coming down here, you're telling us what to do. You're like 26, who do you think you are?

• 53:49Speaker 01

  I was a hard guy to work with for sure for a factory. You know, the reason that we turned it, I mean, listen, at the end of the day, they just wanted business and I told them that we would sell 2,000 pairs. They didn't really believe me, but they, they were just surprised that I came back for reorder and I came back for reorder three months in. I said, I actually, I'm on track to sell all 2,000 over the four months. I think ultimately, no matter how much I pissed anyone off with being an annoying client to work with, we ultimately won with business and doing what we said we were going to do.

• 54:25Guy Raz?

  When we come back in just a moment, why Paul decides to take a major risk and move from just online sales to brick and mortar as well. Stay with us. I'm Guy Raz and you're listening to How I Built This.

• 54:54Guy Raz?

  Hey, welcome back to How I Built This. I'm Guy Raz. So it's 2015 and just two months after launching the brand to Kova's, Paul has done over $100,000 in sales and he's selling his cowboy boots in two ways, online and out of his car.

• 55:11Speaker 01

  I had sold my car and bought a kind of a beater, an old truck, old SUV, and I would drive that to farmer's markets. I think our second best sales day of 2015, aside from launch day, was me driving to my middle school in Dallas and selling boots from a table at the holiday market. In fact, my mom came and helped me with the booth. My parents were still living in Dallas at the time. I think we sold $4,000, so call it 20 pairs at that thing. And so it was just little by little. And I really believed in getting out there in front of customers. I didn't think that sitting in front of my

• 55:53Speaker 01

  computer and reading customer service emails, although that was helpful, was going to really drive it to the next level. I wanted live interaction. And so I told myself, and once I hired my first teammate at the end of December, I told him to...

• 56:07Guy Raz?

  This is Brandon Wendell, right?

• 56:09Speaker 01

  Yeah, Brandon Wendell.

• 56:10Guy Raz?

  And who was he? What was his job?

• 56:14Speaker 01

  His title was, I think, Growth Lead. So we had ended up raising some angel capital. And one of the guys who I had reached out to about raising money was an angel investor out in DC. Brandon had been working for him. So he actually called me. And I was, I mean, he didn't know, but I was sort of desperate for help. And I had already tried to convince a family friend to join me. I tried to, I hit up the McKinsey and Bain message boards and tried to convince people to join me. But Brandon was hungry. I told him, listen, what I don't know how to do is market. It's very clear that we're going to need to learn how to digital market and we're going to have to learn the universe of...

• 56:59Speaker 01

  Of social media, how about you figure that out? So, you know, we started testing digital marketing very early. We started working with an agency on Facebook advertising, probably by that January.

• 57:11Guy Raz?

  And did that pay off, the Facebook ads?

• 57:13Speaker 01

  Yeah, we were, man, there was a combination of there not being any other, I think, Western boot brands advertising at the time and us having a really compelling value proposition. And candidly, man, we had product market fit and people loved the boots. And so we were able to advertise pretty early and I mean, I think we were paying ourselves like 50 grand. So we had enough capital to test. And, you know, it turned into a game of when the dollars had to go out the door for the next order and how much we could afford on advertising that week and what is our stock level and how much when our stock level goes down, does our, does our return on advertising

• 57:55Speaker 01

  spend go down and tweaking it to become almost like a trading floor. And then I, on the other, while he was managing the spend, I was going down to Mexico every month and, I mean, I was negotiating all the way down to the timeframe. So I would say, all right, this is the date that we're, we're going to commit to the overall quantity. And then a few weeks later, this is the date that we're going to commit to the color makeup so we can buy that leather order. Then here's the date we're going to agree on the actual size cut. And it was as, you know, as late as possible so I could have as much inventory data as possible and had a constant kind of model flowing. So only because of that were we able to attract eyeballs, convert the eyeballs.

• 58:37Speaker 01

  Basically got 2 million revenue out of it and broke even.

• 58:43Guy Raz?

  I mean, 2017, you're doing $10 million in revenue and you, you're profitable.

• 58:49Speaker 01

  Yeah.

• 58:49Guy Raz?

  When did these other bootmakers start to notice? And, and I imagine some of them were probably a little annoyed with your approach because you were undercutting their prices.

• 58:58Speaker 01

  The truth is, I don't know when because we never really heard from them. I do remember a moment, yeah, so we, we did about a little under 2 million the first year, 13 the second. And it was coming into that third full year in business, 2018, that we were clearly making a pretty big splash. And I remember sitting next to one of the other boot executives on a plane to Leon and him telling me, man, we're, we're actually, we're starting to feel y'alls business.

• 59:27Speaker 01

  And I said, oh, well, sorry, happy to be in the industry. You know, we're still pretty young and don't know what we're doing. And, and they, they actually said something encouraging. They said, you know, listen, you're doing something right. People are buying it. So I don't remember exactly what he said, but it was sort of a happy hunting.

• 59:42Guy Raz?

  Yeah.

• 59:43Speaker 01

  Mindset.

• 59:45Guy Raz?

  Paul, I mean, by the end of 2018, you do a series A round and you raise a lot of money, $30 million. So I have to imagine that by this point, you have really serious expansion plans. And it's not just going to be cowboy boots. It's going to be apparel. It's going to be, you know, accessories, leather belts, other things, eventually cowboy hats, all these things that you would eventually do. But it was also going to be stores. And in, I think, early spring of 2019, you open your first brick and mortar store. This is, I think, still your, one of your flagship stores in Austin on South Congress Street. Now you're, you're going from D to C to brick and mortar.

• 1:00:23Guy Raz?

  There's some crossover here, but tell me why the store, why that shift to doing brick and mortar was important? Because this was a time, I think a lot of people forget where the narrative was, brick and mortar is dead. You know, it's just a waste of money. Obviously Warby Parker did brick and mortar away. Other brands, Allbirds. For some of these brands, it worked. For some, it didn't. But what was the thinking behind it? When the sort of the, the conventional wisdom was like, it's dead. No one's going to be doing brick and mortar.

• 1:00:55Speaker 01

  Yeah. So, I mean, I go back to like the original inspiration for a boot and it was the, and the cowboy boot is the, it has a story. People have a story about how they bought it, how they found it, or whether they got handed down, whether they got it at the thrift store, whether their grandfather gave it to them. And I just think, I kind of thought, listen, this, I feel like we're almost succeeding in spite of our business model, not because of it. And I wanted this creative outlet. I wanted, I had this vision of hospitality for the brand that, that went way further than the customer experience associates because.

• 1:01:30Speaker 01

  There isn't really anything that special about really good customer service if it's still limited to phone, email and chat. And then I had these theories that there was also a gap in the market. There was no premium contemporary brand in the space and now we are the premium contemporary brand. And if you go look at what premium contemporary brands do, they grow through retail. Go look at Lululemon, they're the primary example. And I kind of considered ourselves the Lululemon of boots. You had to kind of touch it to believe it, feel it to believe it, fit it to believe it. It kind of felt like that was our equivalent. And there was no premium contemporary retail. You basically had independent specialty retailers and then you had big box retailers,

• 1:02:14Speaker 01

  but you didn't have any high street, didn't have any mall, you didn't have any premium outdoor lifestyle centers. So there was this massive marketplace gap to fill as well.

• 1:02:23Guy Raz?

  So, all right, so you opened this store. I've seen lots of photos of it and it's a beautiful space. I mean, it's wood, wood ceilings and really sort of browns, the colors in there are very, even the wood is very leathery looking. And you go in and I guess you get a drink. You get a glass of bourbon or something if you want and they'll shine your boots. And tell me about that experience because it seems very, like there's a lot going on there. What did you want the store to be?

• 1:02:55Speaker 01

  I want it to be fun. We were a very, we had a very fun internal culture and I wanted to translate that to, to our customers. And I wanted to think about all of the things that we could say yes to. Like, could we have a bar in the store that's sort of free drinks? Could we have boot shines? And now we do personalization in store. We started branding boots last year and, you know, finally, I think we've been able to give the customer what they want when you invest in that. When you invest $400 in a pair of boots, you want, you want it to fit right. So, okay, we've got boot stretchers in the store. Oh, you want to be able to personalize, it's a gift. Okay, we'll be, we'll just say yes to you for that. You want to bring your old pair in and get it shined? Okay, we'll say yes to you for that. It's, it's an investment.

• 1:03:40Speaker 01

  And, you know, the stores have really allowed us to kind of come full circle on delivering that promise.

• 1:03:48Guy Raz?

  So I think by the end of that year of 2019, you had opened a total of five stores. And I think not all of them were in Texas, right? I think there was one in like.

• 1:03:59Speaker 01

  One was in Oklahoma.

• 1:04:00Guy Raz?

  Five stores and you're growing like crazy. And there's in, you know, it takes us to February of 2020. You raised $27 million Series B. I mean, you're really humming along here. March 2020, March 13th, you open another store. And then a couple of days later, the shutdowns begin all over the country.

• 1:04:26Speaker 01

  Oh, man. Yeah, that was a, that was a doozy.

• 1:04:29Guy Raz?

  I think by the third week of March, your run rate drops 50%.

• 1:04:35Speaker 01

  Yeah.

• 1:04:35Guy Raz?

  And I mean, 50% of a drop in sales. You have to make some serious decisions about how you're spending because so much of your business is still direct to consumer, which means you guys are spending a lot of money on, on ads. You had to basically stop that, which is going to have an impact on, on revenue because fewer people are going to see those ads, leading to fewer orders.

• 1:04:59Speaker 01

  Yeah, it was a, obviously we had to close the six stores, one of which had just opened, which was such a surreal experience, opening that weekend, you know, with everyone's can't get hand sanitizer. I think I had a box of baby wipes in my back pocket, you know, shaking 100 hands. Yeah, but I get a frantic call from an investor that Saturday or Sunday saying, we got to figure out a, a plan to not go out of business. And man, then things got really bad, honestly. Probably the toughest moment of my life personally. You know, we had to act, we, I made a three-pronged plan. That was, you know, kind of realized, hey, this is one of those moments you define your

• 1:05:42Speaker 01

  career as a CEO when a crisis like this happens. You know, we had to stem the bleeding. I did have to reduce the workforce. I think we had 70 employees at the time and we did a reduction in force of about 20. And then we lowered everyone's salary as well. And then I had to raise it kind of an emergency round that summer. So that was like the not fun prong. And then the other two prongs were lean in. And the other two prongs were hug the customer and hug our, hug our partners and play offense. And so hug the customer was let's keep launching our new product. Every other brand in the industry was cutting all innovation, cutting all new launches.

• 1:06:25Guy Raz?

  But I'm just curious, as your fortunes begin to plummet, right? This is a very scary time for a lot of retailers. Their fortunes were turned dramatically within a few months, in some cases, a few weeks. But in your case, it was different because you're selling a product that people generally wear outside, right? This is not athleisure wear or slippers. Like this is something you wear to go out and to be out and about. Like business suits, for example, just dropped, sales dropped. Formal wear, you know, or sort of going out clothes, designer stuff. When did you start to see sales pick up? Because they would pick up in 2020.

• 1:07:08Speaker 01

  It didn't pick up until the winter, really. And, you know, it was basically Q2 and Q3 that year were all just us emailing and keeping live the people who really liked Tecovas already. It was just staying afloat. And by the way, the, the reason we, it picked up is that third prong was play offense and hug our partners. Our partners were our landlords and our factories. And we didn't cut any orders. You know, we kept making stuff. We had, you know, we raised money to make sure we could pay for inventory.

• 1:07:42Guy Raz?

  But what do you think explains it? I mean, your sales dropped 50% in the first week of this thing. But then by the end of the year, you're 10 million more in profit than in the previous year. What, what explains it?

• 1:07:55Speaker 01

  I think it was us believing in the brand. I mean, we bet on the brand, to be clear.

• 1:07:59Guy Raz?

  But what does that mean?

• 1:08:01Speaker 01

  We opened eight stores.

• 1:08:03Guy Raz?

  Right.

• 1:08:03Speaker 01

  And those stores, by the way, we, you know, we were in Texas.

• 1:08:08Guy Raz?

  So you could be open.

• 1:08:09Speaker 01

  We reopened our store in, in April.

• 1:08:11Guy Raz?

  You're not in California where you couldn't, everything was shut until 2021.

• 1:08:14Speaker 01

  I think we literally were closed for three weeks.

• 1:08:18Guy Raz?

  Right.

• 1:08:18Speaker 01

  You know, obviously foot traffic was plummeted. People were in masks, but people were shopping again.

• 1:08:24Guy Raz?

  People were in the stores.

• 1:08:25Speaker 01

  Yeah, I think we really, let's, let's be clear. We benefited from being a Mostly Texas and Southern oriented brand. I think the brands that really got, the retail spots that really got hit were the Northeast and the, and the West Coast.

• 1:08:39Guy Raz?

  Was the experience somewhat different when people were coming in and everyone was wearing a mask, like all the customer service people probably couldn't serve drinks or you weren't serving drinks or what?

• 1:08:48Speaker 01

  I think we were still serving drinks, yeah.

• 1:08:52Speaker 01

  You know, people lowered their masks during the drink, just like on the airplane and, but, you know, you might remember that was a, masks became a politically

• 1:09:00Guy Raz?

  Yeah.

• 1:09:00Speaker 01

  charged thing. And so that became a hard thing to figure out. We always wore them, but we kind of stopped dictating that customers wear them at some point.

• 1:09:09Guy Raz?

  I mean, the race is an interesting question, right? Because you're not Starbucks, right? And Starbucks, for a long time, seemed to be appealing to sort of center, left of center consumers, you know, with their public campaigns and supporting social justice and all these things. You are a Texan brand, right? Appealing to not just Texans or Southerners, but, but people who sort of are attracted to kind of Western wear and that lifestyle. And not to stereotype, but let's just say that at least half of them are going to be slightly more conservative. Is it, I mean, you mentioned this idea of masks being kind of a political litmus test. And so I wonder if you guys kind of had a, had a moment in the business

• 1:09:52Guy Raz?

  and say, look, we have to respond to our customers. Like if they don't want this, if they're not going to want us to be wearing masks in stores, we shouldn't.

• 1:10:01Speaker 01

  Yeah. Listen, politics has always been an interesting question here. We have remained fiercely apolitical

• 1:10:09Guy Raz?

  Neutral, right.

• 1:10:10Speaker 01

  Since day one. You know, I'd, I'd say that we're, we probably have a surprisingly even

• 1:10:18Guy Raz?

  Yeah.

• 1:10:18Speaker 01

  demographic spread across.

• 1:10:20Guy Raz?

  I mean, it's remarkable that like Western wear, you know, which has been around since the 19th century, right? In different versions, like cowboy hats and boots and denim and that whole look, right? You know, the stitched shirts and.

• 1:10:33Guy Raz?

  You know, it could have become like wearing a dirndl, like being a Bavarian in Germany, right? Or like in Austria, right? Like, it could have been like this weird thing that you just did during Oktoberfest. But it is a, an enduring global phenomenon. Like, you go to China today and like, people are wearing Wranglers and Levi's. You go to, you know, Japan, people are in cowboy hats. I mean, there's something about Western wear, cowboy hats, cowboy boots, that's just so enduring. What do you think explains that?

• 1:11:02Speaker 01

  One thing I'll say, it is, always has been part of the American diaspora of style, Western has, as you point out. It's had its ups and downs as well. It's been a trend that goes, it's kind of been a jagged curve up and to the right in terms of the growth of the cowboy boot industry. But if you drive 30 minutes outside of any city, including the Bay Area, in the country, you're probably going to see more pickup truck advertisements. The radio probably turns to country. And the point is, there's a huge base that's always there and always has been there. But I also, something feels like it's turned. And when people ask me about, you know, hey, the last few years,

• 1:11:47Speaker 01

  it feels like boots are more in trend. You know, my first response is, well, you know, it isn't really a new thing. It's always been around. Maybe your friends just started wearing them in Manhattan, perhaps. But I actually am excited because I think it passed a tipping point.

• 1:12:02Guy Raz?

  Um, I want to sort of jump ahead a little bit because I'm curious about how you, and you look back on it, because we're going to talk about in a moment about leaving the leadership role. But, you know, you were a young guy when you started this, 25, 26, and now you've scaled it. But what did you think about managing people and being a leader? Did you feel like you were good at it? It's really hard. I mean, some people are naturally good at it, and most people have to learn it. And usually, they're bad at it for a while.

• 1:12:31Speaker 01

  Yeah, I think I definitely was bad at first. And I think the whole time I thought I was bad. All of the hardest moments of the business come from people, whether or not you made. Usually it was when you made the wrong hire or you had to fire someone. It's the lowest lows of any day. And I think I didn't realize how that I was actually doing a pretty good job most of the time. And so, but I beat myself up a lot. And that was actually one of the reasons I started looking for leverage in the business.

• 1:13:01Guy Raz?

  When you say leverage, you started looking for?

• 1:13:03Speaker 01

  Yeah, I wanted an executive who can help take a bunch of the business functions off my hands. I stopped recruiting for that role during COVID until late 21, when we had sort of exploded. I mean, we'd gone from, I think we did went from 80 to 140 million in revenue between 2020 and 2021. And it was so clear that the company was on a good track again post-COVID. So I was like, okay, here's the time to like, address my own, my own management desires at this point.

• 1:13:33Guy Raz?

  You wanted to focus on things like branding, creative experience rather than operations and, and employees and management and things like that?

• 1:13:43Speaker 01

  Yeah, I was passionate about product, about retail and about brand. And so it was a hard decision, obviously. I mean, my identity was, has been tied in this business for almost a decade at that point and over a decade now. I realized I didn't need it for my ego, though. I didn't.

• 1:14:03Guy Raz?

  Yeah.

• 1:14:04Speaker 01

  I didn't need to be CEO to be happy.

• 1:14:08Guy Raz?

  In June of 2022, you bring on David Lafitte to be the CEO at Tecovas and you transition to become executive chairman. And at that point, you step away from the day-to-day operations. So just reflect on that for a moment. I mean, I'm sure on the one hand, it was really, it was a relief because you didn't have the same level of stress and just constant fires. But on the other hand, you didn't have the same level of stress and constant fires, which is also extremely, you know, it's stimulating. And all of a sudden, like, not as many phone calls, not as many emails, like you're not needed it in the same way. How did you personally cope with that change?

• 1:14:49Speaker 01

  Well, it's been an evolution and you're right, a lot goes out the door. It's been a sort of an extreme exercise in self-awareness. And there are days when I realize my ego hasn't been filled up and I haven't done the things that I used to do that give me creative fulfillment. And those days are hard. And what I would say is it's not for everyone. To be clear, some people should run their businesses forever. Some people need to be told to get out of the way. Some people need to be told to go away. But one blind spot that I think I've noticed in myself when I reflect is that it's taken me about three years, I think, to realize that my style that I had was actually really

• 1:15:33Speaker 01

  good for the first, you know, seven or eight years and maybe would have been a little bit challenging in these next five years. And I've been a lot more reflective and grateful, I think, recently, but it took me a while to get there.

• 1:15:48Guy Raz?

  Paul, you, and I say this to you, speaking as an older guy to a younger guy here, because I'm about 15 years older than you. You what, you're 36, almost 37, I think, right?

• 1:15:57Speaker 01

  Yeah, by the time this airs, I'll be, I turn 37 next week.

• 1:16:00Guy Raz?

  Okay, so, but I'm 50, so it's a little older than you. And you are still a young guy. You've made some money because you started this brand and it's successful and you'll probably make more once it, you know, if it ever goes public or it's bought out by somebody else.

• 1:16:16Guy Raz?

  I'm sorry, it's a heavy question, but how do you see sort of, let's just say, the next 10 years of your life unfolding?

• 1:16:23Speaker 01

  You know, it's funny, I've literally spent, this has been my main focus of the last few weeks and months really, has been asking myself these questions. Not to dodge it, but I would say that the question I get the most is what's next? What's next?

• 1:16:37Guy Raz?

  Yeah.

• 1:16:38Speaker 01

  I let it pressure me into thinking about a lot of ideas. I thought about starting another company and I realized that wasn't the right answer right now and that there's two things that are true. One's kind of logical and one's a little illogical or faith-based. The logical thing is, Tecovas is still growing. Tecovas still has a job to do and I still have a really important job to do as its founder and as its chairman. But then the other man, the other answer to your question is I have no idea. And I'm just getting comfortable with the idea that I don't know. And that's okay. And I think I've never not known, I've never not had the next step and I've, my whole life, I had the The school, the next school, the job, the job, the thing, the thing, the thing, the next

• 1:17:22Speaker 01

  year, the next budget, and I don't have that now. And I think that's okay. And I'm putting a little trust in the universe, honestly. It's a little woo, woo woo, but I'm putting a little trust in the universe that whatever it is I'm doing right is going to guide me to those next things.

• 1:17:40Guy Raz?

  Paul, when you think about the journey you took, right, and like launching this in 2015, starting in 2014, but launching in 2015, and then now this business is going to do like, what, in sales this year?

• 1:17:52Speaker 01

  Yeah, we'll definitely exceed 300 million in net sales this year.

• 1:17:56Guy Raz?

  I mean, it's amazing. And you've got how many stores?

• 1:17:59Speaker 01

  We have 42 stores in 20 states.

• 1:18:03Guy Raz?

  So when you think about that, you know, a category that you weren't initially super confident about, and where it is now, and you know what you've been able to do, how much of where you are now do you attribute to the work that you put in, the grind? And how much do you think had to do with just luck that people, it just appealed to people, this brand, this name, this kind of the zeitgeist around western wear?

• 1:18:29Speaker 01

  Guy, as I told you when we first met, I'd been listening to your show for a decade or so.

• 1:18:36Guy Raz?

  So you've answered this question in the mirror with a phone, with a brush?

• 1:18:38Speaker 01

  You know, I haven't, and I, but I did, I could tell you what I would, I would have said five years ago. Yeah. I used to not like this question, honestly. I used to be, you know what? It's not luck. It's all, there's no luck. It's all, life is what you make it. But man, I do have such a greater appreciation now that I've reflected on it, on the circumstances that had to unfold for me to be where I was, for me to be born where I was, for me to have had a crisis that I could not have possibly been thankful for, that turned me into the CEO I wanted to be, that, God, so many moments that I don't think ever would have happened

• 1:19:20Speaker 01

  that I had no control over, and that certainly nothing to do with my skill or will. So I think I appreciate a lot more the way the universe unfolds in mysterious ways, whatever you want to call that.

• 1:19:35Guy Raz?

  That's Paul Hedrick, founder of Tecovas. By the way, if anyone ever doubted that western wear is having a moment, look no further than Tecovas' newest flagship store, set to open in the fall of 2025, right in the heart of Soho in New York City. Paul, who came up with the idea for Tecovas when he was still living in New York more than a decade ago, calls it his "full-circle moment."

• 1:20:04Guy Raz?

  Hey, thanks so much for listening to the show this week. Please make sure to click the Follow button on your podcast app so you never miss a new episode of the show. And if you're interested in insights, ideas, and lessons from some of the world's greatest entrepreneurs, please sign up for my newsletter at guyraz.com or on Substack. This episode was produced by Alex Cheng with music composed by Ramtin Arablouei. It was edited by Neva Grant with research help from Iman Maani. Our engineers were Patrick Murray and Robert Rodriguez. Our production staff also includes Chris Messini, J.C. Howard, Casey Herman, Sam Paulson, Kerry Thompson, Catherine Seifer, John Isabella, and Elaine Coats. I'm Guy Raz, and you've been listening to How I Built This.