Live Episode! OtterBox: Curt Richardson

In the 1980s and 90s, Curt Richardson started making simple plastic boxes in his garage in Fort Collins, Colorado. They were originally designed to keep small items dry while you're fishing or skiing, and Curt and his wife Nancy called them "Otter Boxes." But after the launch of the Blackberry and the iPod, Curt started tailoring the boxes to fit and protect the breakable devices – and OtterBox evolved from an outdoor goods supplier into a company tightly adhered to the tech industry. With the rise of smartphones, Otter Products grew by more than 1000% in just five years. Today, it controls a massive share of the phone case market and sells more than $1 billion in cases each year. This interview was recorded live at the Paramount Theatre in Denver, Colorado. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Speaker 00

  This is a great story. So I remember being at CES and--

• 0:07Guy Raz?

  In Las Vegas.

• 0:08Speaker 00

  In Vegas. And Michael Cowan, who was the head guy for stuff at AT&T, came by and showed him the case. And he said, well, how much is it? I said, well, it retails for $49.95. He's like, you're crazy. $49.95?

• 0:23Guy Raz?

  Crazy.

• 0:23Speaker 00

  Who's gonna buy a case? All the cases were like five bucks.

• 0:26Guy Raz?

  It's nuts. Right, yeah.

• 0:27Speaker 00

  So he said, but we'll do a test. So they did a test and they were going to do a three-month test. Well, I think they did a three-day test because they all sold out. They sold like crazy. I mean, it was like that UPS commercial, you know, where it's like, tic, tic, tic, tic, tic, tic, tic, tic. And we're going, oh, crap.

• 0:51Guy Raz?

  From NPR, it's How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

• 1:02Guy Raz?

  I'm Guy Raz, and on the show today, how Kurt Richardson went from apprentice at a plastic molding workshop to building OtterBox, a company that today sells more than $1 billion worth of mobile phone cases each year.

• 1:20Guy Raz?

  So in a gold rush, as you've probably heard, it's better to sell pickaxes and shovels than to mine for the actual gold. That's why you know the name Levi Strauss, or Ghirardelli, or Wells Fargo. These are the companies that made lots of money by offering clothing, and chocolate, and banking services to the people who came out to California to mine for gold in 1849. And today, some of the most successful companies are doing more or less the same thing around tech. Toby Lutke saw lots of people starting e-commerce businesses in the mid-2000s. So he developed software to make it easy to launch an online store and called it Shopify.

• 2:01Guy Raz?

  Chet Pipkin created Belkin in the 1980s because, as personal computers and printers started to get more popular, he realized people-- People needed cables to connect all their equipment. And Kurt Richardson watched the rise of expensive, personal handheld devices, and he realized that people might want to protect them. That insight was what turned OtterBox from a company that literally made waterproof boxes for people on fishing trips into a brand that now dominates the market for smartphone cases. Not only that, but the company is still privately owned by Kurt himself, a company now valued at more than $1 billion.

• 2:41Guy Raz?

  But getting to this point involved a few bankruptcies, several lean years of almost no revenue, and almost two decades of tinkering with plastic to figure out that phone cases were going to be big. But before all of that happened, Kurt was mainly just making plastic parts for other companies, mostly in his garage in Fort Collins, Colorado. Last month, I sat down with Kurt at the Paramount Theater in Denver in front of a live audience to hear how he built OtterBox. A lot of otters here tonight, Kurt.

• 3:17Speaker 00

  There's a couple, yeah. It feels like a company meeting.

• 3:20Guy Raz?

  My gosh. Thank you for being here.

• 3:23Speaker 00

  You bet.

• 3:24Guy Raz?

  Tell me a little about where you grew up and your childhood, because you grew up like on the southern border, right, of Colorado?

• 3:32Speaker 00

  Right. I grew up in a small town called Boncarbo, Colorado, down by Trinidad, Colorado. So, anybody here from Boncarbo?

• 3:42Guy Raz?

  Yeah.

• 3:43Speaker 00

  Yeah, right.

• 3:44Guy Raz?

  Yeah, maybe up there.

• 3:46Speaker 00

  I think there was two people in that town. Yeah, that was it.

• 3:50Guy Raz?

  And what was life like as a kid? I mean, were you outdoors a lot? Were you up in mountains? Were you?

• 3:58Speaker 00

  Yeah, we lived in the mountains. We lived at the base of the Spanish Peaks, on the south side of the Spanish Peaks. So, we were in Upper Borough Canyon. My dad's a minister, and we moved up there in the middle of nowhere, and he started a church there.

• 4:12Guy Raz?

  So, given that you were the minister's son, does that mean you were, you know, pretty well behaved, pretty good student, good listener?

• 4:19Speaker 00

  No. No, I was probably the problem child. I was definitely a C student, bordering on a D.

• 4:26Guy Raz?

  Huh.

• 4:27Speaker 00

  Yeah.

• 4:29Guy Raz?

  And I mean, I'm trying to figure out like what, I mean, did your parents sort of expect you, for example, to go to college and, and sort of pursue that kind of professional life?

• 4:42Speaker 00

  Oh, they wanted me to. I know my mom did, you know, I know she wanted me to be an engineer and, but I really had no desire to go to college. It was, I was all about work, working with my hands and that really was formed from high school experiences.

• 5:01Guy Raz?

  You got really into like metalworking, I read, right? Like you'd go to the metal shop in high school?

• 5:04Speaker 00

  Yeah, our school had a vocational program and you got exposed to four different classes and the one that struck me right away was machine shop. So I walked into a machine shop, I knew what I wanted to do. I wanted to own my shop, my own shop.

• 5:19Guy Raz?

  And, and so you finish high school and you go right into this line of work, like you look for a job that...

• 5:26Speaker 00

  Right, I, I had heard about a program in Fort Collins, Woodward Governor, had an academy there where they taught you machining and eventually you could get your engineering degree. That didn't happen because I only lasted three months there, so.

• 5:40Guy Raz?

  Yeah. At Woodward, Woodward Governor, which was a program in Fort Collins? And you were doing what? Were you working on plastics at the time or metals?

• 5:50Speaker 00

  I was just pulling a handle. I was a robot.

• 5:52Guy Raz?

  Right.

• 5:53Speaker 00

  Yeah, and that was, that pretty much turned me off from that experience right away.

• 5:58Guy Raz?

  And so what did you do? I mean, you're like 18, 19 years old, you don't have any formal education beyond high school and I have to assume you weren't technically probably great as a metal worker or plastics worker.

• 6:11Speaker 00

  No, no, I wasn't there yet. So I heard about a small company in Fort Collins, Technical Molded Products, and they had a opening for an apprentice and, and a guy luckily hired me on.

• 6:24Guy Raz?

  What did they make?

• 6:25Speaker 00

  Plastic products, just for about anything, whether it was garden tools, um, they were making a lot of parts for Coors at the time, so, plastic parts.

• 6:34Guy Raz?

  And so you were an apprentice and you were kind of learning how to do this, how to...

• 6:38Speaker 00

  I was a tool maker. I was learning how to be a tool and die maker.

• 6:41Guy Raz?

  And just for people who don't really understand how this works, right?

• 6:44Speaker 00

  Sure.

• 6:44Guy Raz?

  Injection molding is basically that, right? You inject...

• 6:48Speaker 00

  Right, right. Injection, I built the injection molds, so the large, and even the first business I bought was that, just building injection molds, steel injection molds.

• 6:57Guy Raz?

  So they're like, imagine like a steel brick almost, right?

• 7:01Speaker 00

  Yeah.

• 7:01Guy Raz?

  And you inject the plastic in that brick for maybe a little part that would appear in a camera?

• 7:06Speaker 00

  Right.

• 7:07Guy Raz?

  Or a medical device?

• 7:08Speaker 00

  Right. Just to give you an idea, you know, a cup like this?

• 7:11Guy Raz?

  Mm-hmm.

• 7:12Speaker 00

  That mold might make four of those every forty-five seconds, but that mold probably weighs close to a ton.

• 7:18Guy Raz?

  Wow. Alright, so you do this for a couple of years.

• 7:23Speaker 00

  Right.

• 7:23Guy Raz?

  You're still super young, and I guess like, in the early eighties, you decide that you want to go off on your own. You want your own plastics company, and you actually bought a small little company called Genie Plastic Tooling.

• 7:36Speaker 00

  Right.

• 7:36Guy Raz?

  Um, it sounds like a big deal. You bought your own business?

• 7:39Speaker 00

  Yeah, I know, yeah.

• 7:39Guy Raz?

  I mean, wow.

• 7:40Speaker 00

  It wasn't that big a deal. The guy I bought it from had been kicked in the head by a horse, so...

• 7:47Speaker 00

  So he financed it for me, you know?

• 7:53Speaker 00

  Great guy.

• 7:54Guy Raz?

  Who knew that a horse kicking the head was going to change history?

• 7:57Speaker 00

  It changed everybody's trajectory.

• 8:00Guy Raz?

  So you, um, so you take over this business, and what kind of products was Genie Plastic Tooling making?

• 8:06Speaker 00

  They were, again, they were making custom parts for just about anybody that was out there.

• 8:10Guy Raz?

  And you were in like your mid twenties at this point, something like that?

• 8:13Speaker 00

  Twenty-one.

• 8:13Guy Raz?

  Twenty-one.

• 8:14Speaker 00

  Yeah.

• 8:14Guy Raz?

  And was it just you? Was the business just Co Richardson?

• 8:18Speaker 00

  Just me, yeah.

• 8:19Guy Raz?

  Were you making a decent amount of money?

• 8:21Speaker 00

  No.

• 8:22Guy Raz?

  No. Right, okay.

• 8:25Speaker 00

  Yeah, I mean, I was, I bought a job, okay? I mean, really, that's what I did. I was making a decent living, but I wasn't making, I probably in the end of the day wasn't making any more than if I was working for somebody else.

• 8:37Guy Raz?

  Right. So you do this, and, I mean, you were manufacturing the dies, or you were tooling them, right? And then you were trying to cobble business from local, local folks in Fort Collins? And then, and then how, how long did that go? Did that continue?

• 8:53Speaker 00

  Well, it continued off and on for years. I was always building injection molds. Business was always up and down. You know, it went up, it went down, but I was always in the plastics part of business, whether I was importing molds or building molds. It was all around injection molds.

• 9:11Guy Raz?

  Yeah. And I guess, like, around this, you know, in your twenties, you also would meet, in your early twenties, you'd also meet your future wife, who is still your wife to this day, Nancy.

• 9:22Speaker 00

  Yes, yes, she's here. I don't know where she is, but she's out there.

• 9:26Guy Raz?

  You, you-

• 9:29Speaker 00

  She put up with a lot. Yeah.

• 9:32Guy Raz?

  You get married, and pretty soon have a couple of kids, and you were running this plastic tooling company, and then you kind of were sort of, around this time, creating other businesses around plastics and molding and tools.

• 9:48Speaker 00

  Right.

• 9:49Guy Raz?

  What, what was your plan? What was your, the idea of what you thought you would do?

• 9:55Speaker 00

  Plan? Yeah. I didn't have a plan, that was part of the problem. The plan was just do the next thing. I mean, that's how many of us entrepreneurs are in the early days, I believe, and then we grow up. So, a big part of it was, really, as the business grew and matured to a certain point, it would fail. And it'd go back and go back-

• 10:22Guy Raz?

  What do you mean, what, wait, what do you mean it would fail? Like, you had this business, sounds like it was pretty stable, you'd make these pretty complex parts for plastic injections, not a lot of people could do that. How would it fail?

• 10:35Speaker 00

  It would scale so far, as a business, as far as revenue, as far as employees, and then- For whatever reason, it would collapse.

• 10:46Guy Raz?

  Like, orders wouldn't come through?

• 10:47Speaker 00

  Or something would happen within the economy, and the business was so frail that it wouldn't survive it. And I had to back up and start over.

• 10:56Guy Raz?

  When did you have, when did you experience your first bankruptcy?

• 10:59Speaker 00

  Um, I didn't go bankrupt, I just went back to the garage.

• 11:04Guy Raz?

  You go back into the, you moved back into the garage when, when a business wasn't working, or you weren't, um...

• 11:09Speaker 00

  Well, it didn't scale, so it's go, okay, I'm gonna back up, I'm gonna go back to just me, or me and one other guy, and build it up again. Try something a little different, little different slant on the business.

• 11:20Guy Raz?

  Well, yeah, was, I mean, and we're talking about the 80s here, and into the 90s. Um, was, was money ever tight?

• 11:27Speaker 00

  Money was always tight, yeah. You know, it was, payroll was always an issue, and cash flow is what kept me awake, if anything, kept me awake. And so it was, you had to get scrappy. We were very scrappy in those days.

• 11:39Guy Raz?

  I'm, I'm curious, because most of what you were making in the early days were like, a little component part, right?

• 11:45Speaker 00

  Right.

• 11:46Guy Raz?

  Something that would be inside of a device, or a tool, that you would never even know. How did you start to think about, you know, maybe we should make like, something else? Like, what, I guess, boxes, waterproof boxes?

• 11:59Speaker 00

  Well, I think what, well, what drove that way of thinking early on was the fact that I was making things for other people, and I was counting on their ability to run a business, and be successful with their products. So my, my success very much depended on their success.

• 12:15Guy Raz?

  You were part of a supply chain?

• 12:16Speaker 00

  I was, yeah, I was just part of their cycle, really. I was part of the, the beginning of it, and then the production of it. And the hope was that they would sell millions of these things. Well, they didn't.

• 12:27Guy Raz?

  And the millions of these things could be a...

• 12:30Speaker 00

  Could be a small component, could be a, um, a small case for a duck call. I mean, one of our products, this was a good one, was the Lucy Goosey Toilet Paper Holder.

• 12:43Speaker 00

  You see that a lot today, don't you?

• 12:45Guy Raz?

  Wait, this was something you were, you were making a, you were making a component part for somebody else?

• 12:50Speaker 00

  Well, I made the whole thing. So the guy came to me with the idea, we drew it up, we tooled it. You know, it hangs on your tree while you're at the camping site, keeps your toilet paper dry.

• 12:58Guy Raz?

  Oh, this is a, this is a toilet paper roll for when you're camping?

• 13:01Speaker 00

  Yeah, it wouldn't have done well on QVC even.

• 13:03Guy Raz?

  Why do you need a toilet paper roll when you're camping? I mean, couldn't you just get the toilet paper?

• 13:08Speaker 00

  I don't know, it was his idea, wasn't my idea.

• 13:12Guy Raz?

  So, so he comes to you, so, and, and these are the kinds of things that people would come to you and say,

• 13:16Speaker 00

  Oh, yeah.

• 13:16Guy Raz?

  "Hey, I got this idea." What, do you remember anything else?

• 13:19Speaker 00

  Oh, yeah, I remember one, you know, remember the oil cans before you twisted off the top?

• 13:22Guy Raz?

  Sure.

• 13:23Speaker 00

  You had to open them with a can opener? Well, that's how old I am. You know, so, it was basically a spout you stuck into the top of the oil can. It was plastic on the top, had a metal stamped piece that, and it punctured the oil can, you pull your oil out. It worked great, but he didn't sell any.

• 13:39Guy Raz?

  Nobody bought it, okay.

• 13:41Speaker 00

  No, but again, we spent a lot of time and energy developing the tooling, you know, getting, we had the machines to produce these. We did one run, it's a one-run wonder, you know? We had a lot of those.

• 13:53Guy Raz?

  But that, that sort of limitation started to prompt you to think, "How do I take control over this instead of being dependent on someone's product taking off?" You, you were like, "What can I make and bring to market?" Is that what you started to think?

• 14:07Speaker 00

  Yeah, very much so. And I had a, I had a partner at the time that was going, finally said, "Why don't you do your idea?"

• 14:14Guy Raz?

  Which was what?

• 14:14Speaker 00

  Which was, which was a waterproof box.

• 14:17Guy Raz?

  How did, how did that idea even start?

• 14:19Speaker 00

  Um, you know, I'm an outdoors guy, I like gadgets. So, you know, there was Pelikan products out there that made the big boxes.

• 14:27Guy Raz?

  Yep.

• 14:28Speaker 00

  But nobody had small boxes. It's like, "I don't need a box this big." So, um...

• 14:34Guy Raz?

  For like a wallet?

• 14:35Speaker 00

  For a wallet, for a pack of cigarettes, your cigars.

• 14:39Guy Raz?

  Cause you need to keep your cigarettes and cigars dry.

• 14:41Speaker 00

  Right, right. And you're going down the river.

• 14:44Guy Raz?

  In the eighties, in the eighties and nineties.

• 14:46Speaker 00

  Yeah, yeah, yeah. Whatever, your car keys, you know?

• 14:49Guy Raz?

  Right, right.

• 14:49Speaker 00

  So, yeah.

• 14:50Guy Raz?

  And, and, and was this like, the idea was that people... Would bring this on rafting trips and fishing trips?

• 14:55Speaker 00

  Right. It was an outdoor products and, and I always loved the outdoors. So for me, I always had a passion for that, still do today. And so we started with just a very small 1000 series box and it grew from there.

• 15:08Guy Raz?

  And how did you even get the word out? This is like pre-e-commerce, pre-internet. You were just selling it locally at first?

• 15:14Speaker 00

  Well, we started with the Dive, the Dive World and we went to trade shows. We went to trade shows with our boxes and pedaled them, tried to get dealers. We also had a phone bank of guys who we called the dialing for dollars. They'd get on there and they'd call all the different scuba shops and yeah, we had about six or seven different sizes with way too many bad colors. Yeah.

• 15:37Guy Raz?

  And, and did you think, I mean, did you think that this was going to be the business? Like this thing, all you needed was for a big store to carry it, bigger distribution that this was, was like, well, you say we're going to trade shows. That's a big commitment. It's a lot of travel. You've got two kids, you're married. It's a grind, you know?

• 15:55Speaker 00

  It was a grind.

• 15:55Guy Raz?

  It's traveling on planes, it's staying at bad hotels. You're probably trying to save money.

• 16:00Speaker 00

  Yeah.

• 16:00Guy Raz?

  I mean, did you think, if only we can just get this in front of the right people, this can really take off?

• 16:06Speaker 00

  Well, I don't think I ever really thought the box itself would take off, but we started to get people, um, I call it progressive revelation. Okay. So people would come to the trade show booth and go, I've got a PDA, but I really want to use this PDA through the box.

• 16:21Guy Raz?

  The Palm Pilot.

• 16:22Speaker 00

  Palm Pilot. Typically it was a Palm Pilot, an iPack, a

• 16:25Guy Raz?

  Handspring.

• 16:26Speaker 00

  Handspring, those different devices.

• 16:28Guy Raz?

  Mid 90s.

• 16:29Speaker 00

  Yeah, yeah.

• 16:29Guy Raz?

  Yeah.

• 16:30Speaker 00

  Good times, bad clothes. Um, so.

• 16:33Guy Raz?

  Cause this is because people were coming up at trade shows and saying, do you have anything for PDAs?

• 16:37Speaker 00

  Yeah, that I can use through the box.

• 16:39Guy Raz?

  And that was really what sort of sparked this idea? Yeah, maybe it can, you know, come up with something.

• 16:43Speaker 00

  So we came up with a way to do that. We worked on that and we did it for all these different PDAs and then it grew into, um, Some different tablets for medical, things like that, where they wanted waterproof as well, or waterproof or clean proof?

• 16:58Guy Raz?

  And, and were the cases rigid and hard, like the, the boxes?

• 17:04Speaker 00

  The boxes, yeah, we just took our standard box, basically cut a hole in the front and put a membrane on it, so it was nothing pretty about it.

• 17:10Guy Raz?

  That was basically, it was like a hard plastic shell around the PDA and some of them fit the Palm Pilots and some of them fit the hand springs.

• 17:18Speaker 00

  We had different membranes for different, different devices.

• 17:20Guy Raz?

  And, and how did people find out about them?

• 17:22Speaker 00

  Um, well, the internet was just starting. I can always remember the first, we were in Florida and we just had put their first PDA cases online and we started selling one, two, three, and we, man, we're doing $5,000 a month online, we thought we were, we're killing it.

• 17:40Guy Raz?

  Yeah.

• 17:41Speaker 00

  Yeah.

• 17:42Guy Raz?

  And just, just to get back to your, your home life for a moment, I mean, what was the conversation you were having with your wife? Was, was she ever saying, hey, you know, um, what, tell me what's going on with this, this, you know, these boxes?

• 17:54Speaker 00

  Which, which time? No, we, we talked about the business a lot, I mean, it was part of our lives, whether it was in the garage or it was growing somewhere. Um, it was, it was a big part of our lives, I mean, the kids, when it was in the garage, the kids would pick plastic parts in front of TV, the machines would screw up the TV because they'd make static all over the TV and there was always metal chips in the carpet, so yeah, it didn't go over good.

• 18:19Guy Raz?

  Did, did you have an ambition to be a huge manufacturer of a product? Were you thinking, one day I want to be this, I want to make this huge, significant thing? Like, was that even part of your thought process?

• 18:32Speaker 00

  No, it really wasn't. I never discounted it, but I never, I didn't throw it out there like that was what was going to happen until later on. Now, I did do that later on.

• 18:41Guy Raz?

  I mean, in your mind, were you cert, constantly searching for new ideas and new products? Because it sounds like you went from the waterproof boxes to the PDA cases and those were doing okay.

• 18:51Speaker 00

  Well, that was, that was part of the problem early on, was I had too many ideas. So, we had way too many products.

• 18:57Guy Raz?

  So, all right, so this is in, in the mid to late 90s, so... I mean, how are you thinking about business? It sounds like, you know, by this point, you're almost forty. You've got almost twenty years of experience running a small business or small businesses, some that failed and some that were doing okay and were semi-sustainable.

• 19:17Speaker 00

  Yeah, I was, I was still of what I call a firefighter. I mean, I, I got all of my kudos out of putting out the fire of the day. And a lot of people do, I mean, you, if there's a bunch of small business people in here, you realize that there is a fire a day. Some days it's bigger than others. And so, that's what I did. I put out fires. But I soon realized I was the problem.

• 19:42Guy Raz?

  You put out fires because that was interesting to you?

• 19:44Speaker 00

  It was fun.

• 19:44Guy Raz?

  So, some crisis or something not working right?

• 19:48Speaker 00

  I gotta solve the problem, fix it, I'm the hero, rah rah.

• 19:50Guy Raz?

  When did you discover that this was not actually the way to run a business?

• 19:54Speaker 00

  Um, when I had to keep doing it, I got pretty old, I got pretty tired of doing it. It wasn't paying the bills anymore and I was getting tired of doing it. And I was getting to the point where, where's this going? I mean, I'm, I'm just doing the same thing over and over. It's insanity.

• 20:08Guy Raz?

  I guess you came across a book that became extremely influential to you called E-Myth. Um, what, what was the story? What was going on in your personal and your business life that, that kind of led you to read this book?

• 20:21Speaker 00

  Yeah. At that time, we were making otter boxes and I was flying back and forth to China, building tools, bringing the molds back, manufacturing the parts here in the US. And it was just a struggle. It just felt like I was running in mud. And somebody gave me the book E-Myth. I didn't read it on the way to China, but I read it all, all on the way back. You know, that's about a fifteen hour flight. I got off the plane, I went to the payphone and, and I called E-Myth and said, I need help. It was, I, whatever, you got a twelve step program for entrepreneurs, I need to sign up. And...

• 20:58Speaker 00

  And I did. I got a business coach and her name was Donna Yuzelik with E-Myth. And I'll start crying here because she made such a difference in that business. I mean, she changed the whole way, I think. The whole way I went about doing business.

• 21:18Guy Raz?

  By the way, this was not face to face. She was...

• 21:20Speaker 00

  She was assigned to me. So they gave me, they gave me Donna.

• 21:22Guy Raz?

  And you paid the fee or whatever it was?

• 21:24Speaker 00

  Oh yeah, it was the expense of education, yeah. It was, it was, I think it was 500 bucks an hour.

• 21:30Guy Raz?

  What was the, what was the basic, wow, I mean, that's a huge investment to make when you're really...

• 21:35Speaker 00

  Well, yeah, if somebody has no money, that's a lot.

• 21:38Guy Raz?

  Yeah, kinda crazy. You must, there must have been something about this book that just like resonated with you. What, what was it? What, you read this book and you were like, "I've gotta change something." What, what was it?

• 21:51Speaker 00

  Well, if any of you have read that book, it's a story about a lady that makes pies, you know? And so it was her hobby. She loved making pies. She went into business making pies, like I went into business making molds. And it kinda turned into a nightmare. Well, my life had kinda turned into a nightmare. And so it resonated with me that I had to do something different. And what struck me in the book was one of the things that he said is that, "Systems run the business and people run the systems." Now, what does that mean? It doesn't mean you turn people into robots, okay? But it does mean that people don't recreate their job every day.

• 22:32Speaker 00

  And, and that allows them to be more creative and more fulfilled. And I wasn't doing that. I mean, everybody that worked for me had to recreate their job every day and I was just... It was Newton's law everywhere. And it wasn't always a good reaction.

• 22:49Guy Raz?

  So you decide to get a coach to help you out. Really expensive at the time. Still, today is expensive, 500 dollars an hour as like a lawyer. And what?

• 23:00Speaker 00

  They're more than that.

• 23:01Guy Raz?

  They're more than that. That's a cheap lawyer.

• 23:03Speaker 00

  A cheap lawyer, yeah.

• 23:04Guy Raz?

  A cheap lawyer. My god.

• 23:06Speaker 00

  That's, that's right out of school.

• 23:08Guy Raz?

  I'm in public radio.

• 23:09Speaker 00

  Yeah.

• 23:12Guy Raz?

  So you start this process of talking to a person by phone and what could they possibly, how could they possibly help you? What was she telling you?

• 23:21Speaker 00

  Well, I think the first revelation to me with E-Myth was, one of the first things you had to do that they forced you to do, and I talk about this all the time, is to really figure out what you want. So before you can create a vision, before you can create a company, you really have to get to the heart of who you are. And that was really, I mean, that was not an easy process for me. That really, it took me about a month. I mean, she called BS on me a lot of times, you know, just trying to figure out what that really is. I mean, it all comes up with kind of fluffy things, but to get to the heart of the matter, to get to the heart of what really matters to you, deep inside who you are, that's critical. That's really critical.

• 24:06Guy Raz?

  It sounds like a, almost like therapy.

• 24:09Speaker 00

  Well, yeah, it was therapy. Yeah, there was a lot of times it was big time therapy, yeah. That's all she was doing. I would talk to her every week.

• 24:16Guy Raz?

  Okay.

• 24:16Speaker 00

  And so it was two grand a month, but they had a whole program of books that you went through. So you were actually getting an MBA in your business while you're working in your business.

• 24:26Guy Raz?

  I mean, it's interesting because you had considerable experience by this time, like at least 15 years, maybe almost 20 years, running small businesses and just, you know, failing and succeeding with experience. But you really, I guess at the age of 40, kind of must have come to the conclusion that like, I don't know what I'm doing.

• 24:45Speaker 00

  Well, yeah, absolutely.

• 24:47Guy Raz?

  It's kind of amazing.

• 24:48Speaker 00

  No, it was, it was a rude awakening. I mean, I knew how to do it, but I didn't know how to really do it. And that was, that was the problem. I was the problem. And that was, that was tough to come to that realization, but I had to come to that realization and basically go, okay, I gotta start over. So it was a big do-over. I was always reading books. I mean, my idea of a vacation was seven books on a beach, you know? So it was reading business books, trying to figure out what are the best ways to connect the dots. Even today, I would say, there's so many people that influenced my life and the people's lives at Otter that...

• 25:29Speaker 00

  We took their ideas and put them together to really create that business.

• 25:34Guy Raz?

  Now, Otter really began as a kind of a spinoff, a side project of another,

• 25:38Speaker 00

  Right.

• 25:39Guy Raz?

  one of these other kind of plastic injection businesses that you were running. And it was a partnership initially, right?

• 25:46Speaker 00

  Yeah, I had a partnership at that time.

• 25:48Guy Raz?

  And you decide that, I guess around 2001, because you're manufacturing all of your boxes

• 25:54Speaker 00

  Right.

• 25:54Guy Raz?

  and your PDA cases in Fort Collins, and you decide this was not an efficient way to run your business. What did you, what did you do?

• 26:02Speaker 00

  Well, it wasn't, first of all, it wasn't scalable. You couldn't, you couldn't really grow. If all your time is spent out on the manufacturing floor, you're not designing new products, you're not out marketing your products, you're not building a brand, you're not, you don't have time to do any of that. So I started looking through E-Myth, where's my time being spent?

• 26:21Guy Raz?

  Right.

• 26:22Speaker 00

  That was just part of the process. And there was so much of my time consumed there that I had to say, I gotta quit everything I know how to do and do something different. And that's, that was a huge turning point.

• 26:34Guy Raz?

  And you said, we're gonna focus on design and, and marketing here.

• 26:38Speaker 00

  Marketing and sales, yeah.

• 26:39Guy Raz?

  And we will have it made overseas.

• 26:42Speaker 00

  Overseas, yeah. And at that time, that's what we did. We, we did mold some in the United States as much as we could, you know?

• 26:48Guy Raz?

  So 2002, you have a partner, you buy your partner out. It costs you, I've read, $350,000.

• 26:56Speaker 00

  Right. I bought him out for 350 and, and I still owed the bank about a half million bucks.

• 27:01Guy Raz?

  So you had half a million dollars in bank loans that you took out to buy equipment?

• 27:05Speaker 00

  Well, that, yeah, that was leftover debt because right then, you know, dot com had gone down the toilet. And, and all the, a lot of molders along the front range went out of business.

• 27:16Guy Raz?

  Yeah, I have to imagine, 2002, OtterBox, ooh, 350 to buy your partner. I mean, I mean, that's, that's a lot of money. I can't imagine that OtterBox valuation was proportionate to 350,000.

• 27:28Speaker 00

  Yeah, I didn't even try to get a valuation. There was no val- it was all gut at that point that...

• 27:33Guy Raz?

  You wanted to buy your partner out because you wanted this to be your own business?

• 27:36Speaker 00

  Right.

• 27:37Guy Raz?

  Why?

• 27:38Speaker 00

  I didn't want to have, I wanted to either sink or swim on my own. And I think Nancy felt the same way that we needed to do this on our own and give it that kind of shot.

• 27:49Guy Raz?

  How did you come up with the money?

• 27:51Speaker 00

  Well, there was a lot of local people that I knew and met and word spread. I mean, Otter was getting a reputation in Fort Collins. And people were interested in it. And there was people that were not making that much interest on their money. And I said, well, I'll give you 15% every month.

• 28:11Guy Raz?

  If you give me a loan?

• 28:12Speaker 00

  That was a loan.

• 28:13Guy Raz?

  So you were taking 15?

• 28:14Speaker 00

  It was a pawn shop deal, yeah. I was learning.

• 28:17Guy Raz?

  I mean, what a-

• 28:18Speaker 00

  They were the pawn shop, I was the pawn.

• 28:20Guy Raz?

  What an incredibly, incredibly prescient decision you made at the time. But like, you would go to people and say, look, I'll give you 15% interest. I need $10,000 and $20,000 here and there.

• 28:31Speaker 00

  I had a minimum of like a hundred grand. So, I mean, we borrowed up to three and a half to four million dollars, I think, somewhere in that. And we were paying that much interest. But we needed that to build the tooling, to build the products, to go to the shows, to build the brand. We had a plan.

• 28:49Guy Raz?

  So between 2000 and, let's say, 2005, when you were going to people and borrowing money, if somebody had said to you at the time, hey Kurt, I'll give you $100,000, but I want 5% of OtterBox, what would you have said?

• 29:02Speaker 00

  No.

• 29:03Guy Raz?

  No?

• 29:03Speaker 00

  No, I wouldn't have done it.

• 29:05Guy Raz?

  Even though you needed that money to make this work?

• 29:07Speaker 00

  Yeah, I felt that strong, I think, at that point, just based on experience over the years with partnerships and people. Not, not that they're, none of them are bad, they were friends. But it just was, I was not ready for that. I didn't feel that leadership could happen very well through a partnership. Leadership really needed to come from, from one person.

• 29:33Guy Raz?

  So you start to raise the money through loans to buy the equipment that you need to create the

• 29:40Speaker 00

  To buy the tooling

• 29:41Guy Raz?

  The tooling equipment, right?

• 29:42Speaker 00

  Trade shows to be able to

• 29:43Guy Raz?

  To go to trade shows. But why would somebody, I'm just curious, what was the argument you would make at trade shows or people and they say, "Well, why do I need a case for my iPod?"

• 29:51Speaker 00

  Well, if you're going to swim with it.

• 29:54Guy Raz?

  If you're going to swim with it, you want a waterproof, airtight case. So that was really

• 29:58Speaker 00

  Or even, I mean, I can remember a BlackBerry, skiing with a BlackBerry and sweating on it and it croaked. You know, so it didn't take much to kill a BlackBerry or any of those phones back in the day.

• 30:09Guy Raz?

  So, but that was pretty much your business. It was like, any device that came out, iPods, any MP3 players, whatever.

• 30:17Speaker 00

  We were trying to cover it.

• 30:18Guy Raz?

  Did you do the Microsoft Zune? Did you make cases for that?

• 30:20Speaker 00

  Yeah, we did.

• 30:21Guy Raz?

  Wow. Who has a Zune? Yeah. Woo, Zune!

• 30:25Speaker 00

  Sell it on eBay, you'll get a lot of money.

• 30:28Guy Raz?

  That's the person who bought the Zune. All right, so you, you know, you're making these cases. Sounds like by 2005, 2006, pre-iPhone, you've got a pretty good business going.

• 30:40Speaker 00

  Yeah, well, the BlackBerry really was, I mean, that was

• 30:42Guy Raz?

  The BlackBerry was the game changer.

• 30:43Speaker 00

  Yeah, the BlackBerry was a game changer. I remember getting our first million-dollar P.O. from AT&T for the BlackBerry. This is a great story. So I remember being at CES and

• 30:53Guy Raz?

  In Las Vegas.

• 30:54Speaker 00

  In Vegas. And Michael Cowan, who was the head guy for stuff at AT&T, came by and showed him the case and he said, "Well, how much is it?" I said, "Well, it retails for $49.95." He's like, "You're crazy. $49.95? Who's going to buy a case?" All the cases were like five bucks.

• 31:13Guy Raz?

  It's nuts.

• 31:14Speaker 00

  Yeah, so, he said, "But we'll do a test." So they did a test and they were going to do a three-month test. Well, I think they did a three-day test because they all sold out.

• 31:24Guy Raz?

  Wow.

• 31:25Speaker 00

  They sold like crazy. I mean, it was like that UPS commercial, you know, where it's like, "Tick, tick, tick, tick, tick, tick, tick." And we're going, "Oh, crap."

• 31:30Guy Raz?

  When we come back in just a moment, how Kurt navigated those early days of cellphone cases. Well, just around the corner, there was something that would change everything: the iPhone. Stay with us. I'm Guy Raz and you're listening to How I Built This from NPR.

• 31:57Guy Raz?

  Hey, really quick before we get back to the show. If you know of a kid between the ages of, say, four and 12, who is curious about the world and the world of science, you have to check out my kids podcast, Wow in the World. Me and my co-host, Mindy Thomas, travel around the world, backwards and forwards in time, inside the human body, and deep into interstellar space for a show that will take you and the kids you know on an incredible journey. All new episodes begin December 2nd, so check out Wow in the World wherever you get your podcasts.

• 32:36Guy Raz?

  Hey, welcome back to How I Built This. I'm Guy Raz. So it's the mid-2000s, and OtterBox is still a young brand, making bulky waterproof cases for devices like Palm Pilots and BlackBerrys. But things were starting to grow, and suddenly Kurt was in charge of a much larger company than he had ever managed before.

• 32:58Guy Raz?

  By the way, how did you get the name OtterBox? It's a cool name. Obviously, now, you know, everyone knows it. But how did that?

• 33:04Speaker 00

  Nancy.

• 33:05Guy Raz?

  Nancy came up with it.

• 33:05Speaker 00

  Yeah, Nancy came up with the name.

• 33:12Guy Raz?

  Hope she got paid for that.

• 33:14Speaker 00

  Oh, yeah, she's doing really well.

• 33:16Guy Raz?

  OK.

• 33:19Guy Raz?

  So what was the story? I mean, because you had all these, like, I think originally, like, your companies were called, like, Richardson Die-Cast.

• 33:26Speaker 00

  Oh, Richardson Tooling.

• 33:27Guy Raz?

  Richardson Tools, Richardson Injections.

• 33:28Speaker 00

  Ever name a business after yourself. That is, yeah, don't do that.

• 33:31Guy Raz?

  Like, would anybody buy a Richardson smartphone case today?

• 33:35Speaker 00

  No, I wouldn't.

• 33:35Guy Raz?

  No. So OtterBox is a cool name. How did that happen?

• 33:39Speaker 00

  Well, we were looking for names. And, I mean, Pelican was the big animal in the room, and they still make great products. But we were looking for a name. We, you know, we had a walrus, you know, seal cases. And we're driving to Denver. I remember this specifically. And Nancy's like, well, how about Otter? Otter, it's playful, it's fun, it's around the water. OtterBox. It had a great ring, and that was it. Actually, the guy who designed our logo was a T-shirt manufacturer just down the way from...

• 34:08Guy Raz?

  The logo of the...

• 34:10Speaker 00

  Yeah, the OtterBox logo is still the original logo from day one.

• 34:16Guy Raz?

  All right, so you've got the name. You've got this, you know, you're making these cool products.

• 34:22Guy Raz?

  You know, but, but, I, I mean, this is still pre-iPhone, right?

• 34:26Speaker 00

  Right.

• 34:26Guy Raz?

  2007, iPhone comes out. Now, this is, I think, I think it's not controversial to say, probably the most transformational consumer electronics product-

• 34:37Speaker 00

  No, absolutely.

• 34:37Guy Raz?

  -in the last 20 years, maybe 40 years. I mean, hugely important, influential. When, when it came out, I mean, there are some people who say, "I knew it right away. When I saw Steve Jobs at the Cow Palace in San Francisco with his turtleneck, I knew right away that product was gonna change the world." I mean, did you, did you just see that as another thing to make a case for?

• 34:55Speaker 00

  Pretty much. Yeah. It was just another, was it just another guy trying to make a phone, you know? But I will remind you, the BlackBerry was really our testing ground-

• 35:07Guy Raz?

  That was the-

• 35:08Speaker 00

  -our growing ground with that. We, I'll give you another story. When we did the first, Home Depot came to us and said, "Hey, we need a case to protect our, our BlackBerrys." I don't even remember what model it was.

• 35:19Guy Raz?

  These are Home Depot-

• 35:20Speaker 00

  Home Depot.

• 35:21Guy Raz?

  For their employees.

• 35:22Speaker 00

  Cause they're out on the floor, you know? Their associates are out on the floor, and they're dropping these things and they're breaking them.

• 35:26Guy Raz?

  Yeah.

• 35:27Speaker 00

  Management said, "Can you make us a case?" So, we designed a case. Well, this case was, you know, it was like a little kid in a snowsuit. You know, he walks out in the yard and falls in the snow. So, it was a big, fat case. It just, it, it worked, but it didn't really work. So, management loved it. They thought, "Oh, great, we're never gonna break another BlackBerry." Then we give it to the guy on the floor, he goes, "I'm not using this damn thing. This is huge. This thing is a piece of junk," you know? He was right. And so, we said, "But it's waterproof." He says, "I'm in a store, I don't need a waterproof case."

• 35:59Guy Raz?

  Yeah. Cause at that, up till that point, most of what you were making was waterproof.

• 36:03Speaker 00

  Was waterproof. So, "Ah, I need to listen to the customer." There's a big aha, big, big moment.

• 36:09Guy Raz?

  That was a big aha moment. You thought, "Wait a minute."

• 36:11Speaker 00

  "I'm gonna listen to the customer."

• 36:12Guy Raz?

  Not everybody needs a waterproof case.

• 36:13Speaker 00

  Right. So, out of that came the Defender case. The Defender was really what-

• 36:19Guy Raz?

  Yeah.

• 36:20Speaker 00

  -launched Otter, and that was the first case for the iPhone as well. So, we were, we had figured out at the time that it didn't need to be a waterproof case.

• 36:28Guy Raz?

  So, you, you say that when the iPhone came out, to you, it was just another device to make a case for. It wasn't gonna be this, you weren't looking at this and thinking, "This is gonna transform my business."

• 36:39Speaker 00

  No.

• 36:40Guy Raz?

  No.

• 36:41Speaker 00

  I, I knew we were getting traction with the BlackBerry and other devices, so- I knew we were growing and we were growing at a significant pace at the time, but we didn't, I mean, the iPhone 3 was, you know, we were on the launch pad. That's when it took off. But it was also, I mean, growth can be just as tough as no money.

• 37:00Guy Raz?

  Yeah, you got to hire, you've got more people.

• 37:03Speaker 00

  You got systems. So I thought supply chain, I didn't know what supply chain was. I mean, today, I would say Otter probably does supply chain better than just about any business in the United States. But I didn't even know what supply chain was back then. I mean, it was one lady in a closet ordering parts. I mean, that was, that was it.

• 37:22Guy Raz?

  I mean, you didn't not go to business school, you didn't go to college.

• 37:25Speaker 00

  Yeah, I was, I was building the airplane in flight, pretty much, and that was what it felt like, yeah.

• 37:31Guy Raz?

  Wow. Now, I'm, I'm curious, because when the iPhone came out, apparently Steve Jobs did not like cases. He, his iPhone was perfect and beautiful, and he wanted you to look at this beautiful, perfect product. He didn't want to be encumbered by some obnoxious protective case.

• 37:47Speaker 00

  Right, right. The beauty was, he built it out of glass.

• 37:54Speaker 00

  So it looked really good for a while.

• 37:57Guy Raz?

  And, and where, where were people buying? I mean, was OtterBox by that point, by 2007, when the iPhone came out, 2008, was it, um, did it, did you have like a pretty good market, like?

• 38:09Speaker 00

  Right, we were in all the carriers, so...

• 38:11Guy Raz?

  So people knew your brand by that point?

• 38:12Speaker 00

  Yeah, it was becoming pretty well-known.

• 38:14Guy Raz?

  And, I mean, how, do you remember how long it took you from the time that first iPhone came out to the time you were able to deliver those to stores?

• 38:24Speaker 00

  Yeah, from the first one or the, it probably took us 12, 14 weeks.

• 38:28Guy Raz?

  Right.

• 38:29Speaker 00

  That's how long it took us to get to the stores from the time we got the first phone in our hands. We would, we literally had people waiting in line to go buy the phone, and we'd buy 12 phones and start dropping them.

• 38:41Guy Raz?

  Did the iPhone?

• 38:44Guy Raz?

  I mean, did the iPhone, could you see the iPhone dramatically and radically changing your business?

• 38:49Speaker 00

  It absolutely did.

• 38:50Guy Raz?

  That product?

• 38:51Speaker 00

  That product did.

• 38:52Guy Raz?

  And how long do you think it took before you started to notice that?

• 38:55Speaker 00

  Pretty quick, when the orders started coming in.

• 38:57Guy Raz?

  Wow.

• 38:58Speaker 00

  Yeah. I mean, we wore out our molds. We had to build a whole new set of molds because the molds wore out. That's how many we made.

• 39:04Guy Raz?

  Now, I'm really interested in this idea because as you know, some of you may know, Chet Pippen has been on the show. He founded Belkin.

• 39:12Speaker 00

  Mm-hmm.

• 39:13Guy Raz?

  And Belkin's a really interesting product. There are a lot of parallels with what you do, obviously, because they began with peripherals. So, Apple, back in the 80s, if you had an Epson computer, you couldn't connect to another printer. You know, you could only connect to the Epson printer because of the peripherals that they sent you. So, he started soldering them, right?

• 39:32Speaker 00

  Yeah.

• 39:32Guy Raz?

  And really, the story of Belkin is, they saw this gold rush into PCs, and they figured out a sort of a side door entry, sort of like Levi Strauss selling canvas and jeans to gold miners.

• 39:46Speaker 00

  To the gold miners, yeah.

• 39:47Guy Raz?

  To the gold miners, right? This is a similar story. I mean, you see this, right? Steve Jobs predicted that smartphones and tablets were going to replace

• 39:56Speaker 00

  Right.

• 39:57Guy Raz?

  desktop computers, and he's right. That's what you sort of built. I mean, you kind of...

• 40:04Speaker 00

  Yeah, I always compare ourselves to the little fish that's on the side of the shark, you know? And I don't care which shark, or how big the shark is, but we're going to be that fish on that shark. We're going to ride that shark as long as we need to ride that shark. And that's really, it doesn't matter who's building the phone, or what device, if that device is popular, if it's a hit, we want to be there with it. Now, we cover a lot of devices today. We cover just about every model, almost globally.

• 40:34Guy Raz?

  I mean, one of the things about Apple that I would just be so stressed out about, you know, so freaked out about is, they release products on their terms. When they, and, does that stress you out? Every time a new thing comes out?

• 40:48Speaker 00

  Oh, yeah.

• 40:49Guy Raz?

  Came out, you had to like, get this thing made, and you didn't even have access to it until maybe that day it came out.

• 40:54Speaker 00

  It was a fire drill. It was a fire drill.

• 40:56Guy Raz?

  What was the thing that worried you? Were you worried that your competitors would get in there faster, and people would go to like, a competitor's case?

• 41:05Speaker 00

  You know, I never worried too much about competitors. I'm always, I wanted to know what they're doing. I think competition makes you better. I like competition. I mean, today, Otter owns 40% of the case market in the United States.

• 41:19Guy Raz?

  It's insane.

• 41:20Speaker 00

  So, you know, I think if you, I think if you focus on the competition, you're focusing on the wrong thing.

• 41:27Guy Raz?

  But everybody's focused a little bit about, on that, right?

• 41:29Speaker 00

  You want to know what they're doing.

• 41:30Guy Raz?

  If, if a competitor got in there faster and people liked that case, you know...

• 41:35Speaker 00

  Well, I better do it faster next time then.

• 41:38Guy Raz?

  I'm curious, and maybe you don't have the answer to this. I'm just curious about your thoughts on this. Why, you know, why do you think Apple and Samsung and all these other companies, why do you think they kind of embraced the cases? I mean, you could imagine a world where Apple's like, wait a minute, this could be a big revenue generator for us. Let's make the cases and package them with the iPhones and just raise the price and then people don't have to buy the Otter box. Or Samsung could do that. Or why do you think they, they didn't try to like block you at every step of the way? Or did they?

• 42:12Speaker 00

  No, they never did. They never, they never really objected. I mean, we're out in the market, people are buying our cases. I mean, Apple makes cases, Samsung makes cases.

• 42:22Guy Raz?

  But different kinds of cases.

• 42:23Speaker 00

  Right, but they really, that's not their core competency, and I think they realize that, and that is ours.

• 42:30Guy Raz?

  iPads come out, I think around 2010. And instantly, again, you're thinking, here's the next device.

• 42:38Speaker 00

  Right, yeah.

• 42:39Guy Raz?

  And so for you, it's like, you're agnostic. You don't care which, what the product is, you just want to go for it.

• 42:46Speaker 00

  Right, I want them to be successful, because if they're successful, we're successful. Because we, we would attach to those new devices. You know, we always got a percentage of, of sales based on their revenue. So if their, if their device flopped, we didn't sell nearly the amount of cases.

• 43:00Guy Raz?

  So, take me into your process a little bit. You know, they announce a new product, it's all over the internet. What's going on in Fort Collins? Like, are people freaking out, like, let's go?

• 43:11Speaker 00

  Well, we get as, we get as much information as anybody else would get.

• 43:14Guy Raz?

  Right.

• 43:15Speaker 00

  Um, we still were waiting in line with everybody else back in the day.

• 43:18Guy Raz?

  Sure.

• 43:18Speaker 00

  And we would make, um, we would make tools at risk. We would make parts at risk. We knew that-

• 43:24Guy Raz?

  You would basically make molds that you thought might fit the new phones.

• 43:28Speaker 00

  Yeah, in the early days, we, in the early days, definitely, we did that.

• 43:31Guy Raz?

  And you would actually manufacture the cases too?

• 43:33Speaker 00

  We manufactured some parts.

• 43:34Guy Raz?

  And it means you have-

• 43:34Speaker 00

  I remember there was other competition that even made the, made the iPhone mini mini was like this big. It's like, I, I don't know how that got on the internet, but they made molds for it.

• 43:43Guy Raz?

  Oh, they thought that was gonna be iPhone mini mini?

• 43:46Speaker 00

  They thought there was gonna be a miniature iPhone, and yeah, I remember-

• 43:47Guy Raz?

  So you were following the rumors just like everybody else was following the rumors?

• 43:50Speaker 00

  Yeah, that's only, that's all you could do.

• 43:52Guy Raz?

  Which probably meant that you were throwing away a lot of cases in those early days, cause you would make a-

• 43:56Speaker 00

  We, we made a lot of changes. I mean, the tools, some tools got scrapped, some parts got scrapped, but, so we were, we were manufacturing at risk to try to get to market as quick as we could.

• 44:09Guy Raz?

  So here's, here's what's interesting to me about this product, right? You're, you're manufacturing it in different plants around the world. You have to be really careful with your IP. And we did a story, uh, we did an episode on TRX with Randy Hetrick, the TRX Straps and Gyms. And he spent years and years fighting against counterfeiters.

• 44:29Speaker 00

  Mm-hmm.

• 44:30Guy Raz?

  Um, how did, I know that you had a counterfeiting, you had counterfeiters pretty much early on, which can take up a lot of bandwidth, right?

• 44:36Speaker 00

  We have a whole, I have a whole building, um, full of lawyers. Yeah, yeah. We have, we have, we have a whole brand control group and, and actually, it's funny, we, we've worked with border, uh, with the border security and, and, and all the customs, and helped train them on showing what's fraudulent OtterBox. And actually, we'd get, they, they'd pull over containers full of Gucci, Coach, and OtterBoxes.

• 45:06Guy Raz?

  But it must be a whack-a-mole, right? Like, you must still do this all the time. You must still kinda quash counterfeiters.

• 45:13Speaker 00

  Oh yeah, we go out, we go, still today, we go after them all the time.

• 45:16Guy Raz?

  But you have such a huge market share that it probably doesn't really make much of a difference now.

• 45:20Speaker 00

  Well, you know, where it makes a difference is it makes a difference with our customers and our consumers. I mean, we, if they're driving the price down with counterfeit product, it's gonna reflect on us. So, we, we have to, we get very aggressive.

• 45:33Guy Raz?

  Alright, so here, here's the, to me, this is crazy, and it's probably not gonna be crazy to the otters in this crowd, but I think it's gonna be crazy to other people here and people listening. You start this, I mean, 2002, you struggle, you're getting bank loans, you're struggling to like, buy out, you know, payback loans. 2012, you're doing almost half a billion dollars in revenue selling plastic cases!

• 45:57Speaker 00

  Yeah.

• 46:01Guy Raz?

  I mean, I mean, did you think that was, did you even have time to stop?

• 46:06Speaker 00

  Did I dream that that was gonna happen? No, it happened so fast. I mean, literally, it was a rocket ride. I mean, we grew 1,100% in five years. We went from 5 million to 575 million in five years in revenue. And, that's just crazy.

• 46:28Guy Raz?

  2012, that same year you hit almost or more than half a billion revenue, you decide to step down. Company's doing great, you step down, and you move on to kinda do other things. Why? I mean, was it just, it was on autopilot?

• 46:44Speaker 00

  I got bored.

• 46:45Guy Raz?

  You got bored?

• 46:46Speaker 00

  I got bored, yeah. So, in the early days, I'm doing everything, right? I mean, I'm supply chain, I'm finance, I'm, I, I, design, I'm involved in everything. Well, when you hit a half million, on your way to a billion, um...

• 47:05Speaker 00

  Believe it or not, you get rat-holed. And I got, I'm like-

• 47:08Guy Raz?

  You got rattled?

• 47:09Speaker 00

  I got rat-holed. It's like, well, here's what you do.

• 47:11Guy Raz?

  Oh, rat-holed.

• 47:12Speaker 00

  Rat-holed, so I'm like-

• 47:13Guy Raz?

  Like a rat in a hole?

• 47:14Speaker 00

  I'm a rat in a hole, you know?

• 47:15Guy Raz?

  Okay, I see.

• 47:16Speaker 00

  And that's what I felt like, a rat in a hole.

• 47:17Guy Raz?

  I see, okay.

• 47:18Speaker 00

  You know, I was, I was, I was bored.

• 47:21Guy Raz?

  Huh.

• 47:21Speaker 00

  You know, I wanted to go create. So for me, I needed to go and create. And it didn't go very well, very well with my wife, because I didn't really tell her that I was gonna quit.

• 47:30Guy Raz?

  Yeah.

• 47:30Speaker 00

  And, uh, I still hear about that. Um, but that was a whole nother learning for me, too. That was, that was another, um, one where I didn't pass the baton very well. I mean, a lot, a lot of the, I don't want to ever knock anybody, because there, a lot of people had a lot of good things to do with Otter and growing Otter. And, and there was a lot of people that aren't with us today, that I give them credit for helping us build that company. You know, they were.

• 48:00Guy Raz?

  Yeah.

• 48:01Speaker 00

  But a lot of times, a company outgrows people as well, and in some ways, it outgrew me.

• 48:07Guy Raz?

  So you step away, I think for about four years. Um, Otter grows a lot in those four years. You're still the owner of the company, but you kind of step aside. I mean, there was even talk at a certain point in, I think, 2014, 2015, that you were gonna sell the company, and you actually were looking to, to, to sell it, for somebody to acquire it. And I have to assume you had a lot of potential suitors, um, which could have given you and your family a windfall. Um, I think there are many arguments to be made that, you know, you should do it, you should cash in, and, um, why, why didn't you sell?

• 48:43Speaker 00

  I gotta tell you, that was not a fun experience, looking to sell something you love so much. But, um, and even going through the process was very disruptive. And, you know, we worked with Goldman, and we worked with, I, I still remember talking to an old guy at Bain Capital. And, uh, his name was Josh. So Josh, if you're listening, um, he said, he said, "Well, I don't know where Case will be in five years." Well, it's five years, Josh.

• 49:15Guy Raz?

  So you feel fortunate that you didn't sell it?

• 49:18Speaker 00

  Yeah, I'm very glad we didn't sell. I, well, I think for, for us and our family, it would fundamentally change things in Fort Collins.

• 49:28Speaker 00

  Otter is one of the top four employers in Fort Collins. And it's part of the culture, you know? It's part of the fabric of Fort Collins. Now, you know, if,

• 49:42Speaker 00

  if Jeff Bezos calls me tomorrow, I'll take the call, but I don't,

• 49:48Speaker 00

  I don't, you know, I don't, I don't know that we'd get a deal.

• 49:54Speaker 00

  We'd talk, we'd talk. Jeff?

• 49:56Guy Raz?

  You come back to the company and take an active role in 2016. There's some turnover in the leadership, um, and why? I mean, from, from what I've read, you were hearing that the company, that employees were unhappy. There was, um, discontent. Is that why you decided to come back?

• 50:17Speaker 00

  Yeah, absolutely. I had a lot of Otters come to me and, and my boys come to me because a lot of their friends worked at Otter and they're going, "Dad, you need to, you need to go figure out what's going on over there." And, um, I had a lot of people that were really upset and, uh...

• 50:32Guy Raz?

  They were upset, why?

• 50:36Speaker 00

  Because it had been destroyed from culturally. Culturally, the place had completely changed. And that was a huge issue. I mean, they were really upset with just how people were being treated, how the business was running. And again, I don't want to rip on leadership back then. They were just doing what they brought from where they came from. And it wasn't, it wasn't what my intention and my philosophy on, on how to run a business was.

• 51:06Guy Raz?

  And did you feel like you, because you had stepped aside? You let them down?

• 51:12Speaker 00

  Oh, yeah. Yeah, definitely. I had. I definitely had.

• 51:16Guy Raz?

  And that you had to return to restore that?

• 51:20Speaker 00

  I had to get clarity on what was going on. And once I got clarity on what was going on, I knew I had to go back. Now, I knew I wasn't going to go back as the CEO. I did not want to do that. But I had some other great people. Our CEO today, Jim Park, is basically, I can remember, he was running one of our other companies. And we were in a meeting trying to figure out what to do. And we started writing on the board, who's going to do what? And they put my name as CEO. I went up there and erased it and put Jim's name. And he was, he was a little shocked.

• 51:57Guy Raz?

  It's interesting because there are parallels, right? Like Howard Schultz left Starbucks for eight years. He felt like the company lost its way. He came back to restore the culture. Gary Erickson, Gary and his wife, Kit Crawford, came back to Cliff Bar. They'd left.

• 52:14Guy Raz?

  And come back. And it sounds like you had to, you felt compelled to restore a culture that you...

• 52:22Speaker 00

  Now, now, I'm not there every day anymore. I'm, I'm not. I mean, Jim and he, we have an amazing executive team. But we have an amazing leadership team there. And I think with any business, any business we have today, the biggest thing is leadership, whether it's our distillery or one of our other businesses. We're going to put great leadership there. And, and without that, the business is not going to, not going to flourish. And it has to carry out the vision. My job is that of a, as a visionary.

• 52:53Speaker 00

  But even today, that's, that's not my primary role.

• 52:56Guy Raz?

  When, when I say the word "culture," what does that mean? Does that mean? What does that mean in terms of, you know?

• 53:02Speaker 00

  It's, it's how we're going to relate to each other here. It's how we're going to treat each other. It's, it's, it's how we're going to do business. That's the culture. You know, for us, the golden rule is number one. You violate that at Otter, you're in trouble. You know, we're going to treat each other as we'd want to be treated, as you'd want to be treated. And to me, that, I mean, that, you do that, it makes a lot of wrong things right.

• 53:30Guy Raz?

  Kurt, you, I mean, and I think it's a very valid parallel. I mean, you came to Fort Collins like as a kid.

• 53:38Speaker 00

  Mm-hmm.

• 53:39Guy Raz?

  You know, no one would have taken you seriously. I mean, seriously, a little bit, but nobody would have like looked at you maybe when you were 18, you know, as an apprentice and thought, "This guy is gonna be like Levi Strauss." Like, you got to Fort Collins and you own a company that if you sold it, will make you one of the richest people in the United States. I mean, that's, that's a kind of a crazy story. I mean, do you, do you, I mean, what, what, did you ever imagine that when you got there at 18, that you would, you would be that person?

• 54:13Speaker 00

  Nope. No, I really, I really didn't. And even today, it's like, I really don't think that way. Yeah, it's not, it's, it's not about the money. I mean, Otter's mission is we grow to give. So, it really is about giving back. I mean, we, if we make more money, we can give more money away. We can make a difference in community. We can make difference in people's lives. And that's what Otter's really about.

• 54:44Guy Raz?

  Okay. I wanna, I wanna push you on that a little bit, because as you know, I interview a lot of really rich people, because they start big companies. I mean, with that kind of wealth comes responsibility, right?

• 54:59Speaker 00

  Yeah.

• 55:00Guy Raz?

  I don't, I don't wanna sound like a Marvel character.

• 55:01Speaker 00

  Well, I mean, we've always, me and Nancy always say, "To whom much is given, much is expected." Now, we didn't say that. You know, a guy named Jesus came up with that.

• 55:08Guy Raz?

  Right.

• 55:09Speaker 00

  So, you know, it's pretty good. Yeah. So, I mean, we, we really try to live by that, and we've really tried to instill that in our culture.

• 55:17Guy Raz?

  Your, when you think about your legacy, and maybe it may not matter to you, maybe you don't care if people remember you in 100 years. You know, in San Francisco, there's Levi Strauss Square, and maybe you don't care, but...

• 55:28Speaker 00

  No, I'd be dead.

• 55:29Guy Raz?

  You'd be dead. But, you're gonna leave behind, your family's gonna leave behind a lot of money.

• 55:33Speaker 00

  Yeah.

• 55:34Guy Raz?

  More money than, than you will ever need, or many generations after you. What do you wanna happen to that money?

• 55:41Speaker 00

  I would like to see it, bottom line, change people's lives, make a difference in people's lives, be able to educate youth, to be able to make a difference in the world. If we can, if we can help young people start to understand giving to become part of their fabric, much like recycling has become part of much of people's lives today.

• 56:09Guy Raz?

  Sure.

• 56:10Speaker 00

  It was ingrained in them, they're young. We feel like if we can influence them to be entrepreneurs and philanthropists now, that becomes part of their DNA, and think how that multiplies. Think what a difference that makes in the world if we create a bunch of people that want to give back, not just money, but, because not everybody's going to make a ton of money, but they have talents, they have experiences they can share, they can mentor kids. If that becomes part of their fabric, and that's what we've tried to do at Otter, is really install a heart of giving. I mean, for one day a year, we shut down the whole company and everybody goes out and volunteers. I mean, that's one

• 56:49Speaker 00

  thing. We give away 24 hours of, we pay them 24 hours of time to go out and give back in the community, give to the nonprofit of their choice, to spend, but what we're really trying to put in their heart is to give back.

• 57:07Guy Raz?

  One of the things that is really interesting to me is you actually encourage people who come to you, employees who come to you and say, "Hey, you know, I have this idea, I want to leave, I think I want to leave, and here's my business idea." You actually have given loans, like you don't always, I think, most of the time, you don't take equity in their companies, you give them loans and...

• 57:26Speaker 00

  Give them loans, get them started.

• 57:28Guy Raz?

  And then they pay you back, and that's it.

• 57:30Speaker 00

  Right, right. Now, one thing we do for every Otter that's been at OtterBox or any of our other companies, we give them a life plan after a year. So, much like a stratop, they get to spend two days with a life planner and really discover what they want.

• 57:47Guy Raz?

  After a year of work, they get set up with a life planner, and the life planner says, "So what do you want to do with your life?"

• 57:52Speaker 00

  Some of them quit.

• 57:53Guy Raz?

  Some of them quit.

• 57:54Speaker 00

  Yeah, yeah. I don't want to be an honor. And that's okay.

• 57:57Guy Raz?

  Yeah.

• 57:57Speaker 00

  Because that's, for me, for me, my primary aim is really to be able to help people understand their talents that God has given them and help them be the best they can be and really discover that and go out and do that. I want them to do what they want to do. I want people to discover that. I mean, how many people in life get to 50, 60 and go, "My job really sucks"?

• 58:23Guy Raz?

  A lot.

• 58:23Speaker 00

  A lot.

• 58:24Guy Raz?

  Yeah.

• 58:24Speaker 00

  A lot. Well, why don't we, why aren't we teaching people to ask that question early on? What do I really want? What do I want to do? What's in my heart?

• 58:31Guy Raz?

  So even if the most valuable employees you have say, "You know, Kurt, I want to move on to my own thing", you say, "I'm going to cheer you on. Go do it."

• 58:39Speaker 00

  Go do it. Go do it. Absolutely.

• 58:43Guy Raz?

  When you think about your story, because I think it's totally implausible. I mean, high school, get there, machine tooling to a company that is, who knows how much it's worth, billions of dollars. I mean, and the revenue is over a billion dollars. How much of this story, your journey, do you think has to do with your hard work and intelligence and skill and how much is just because you got lucky?

• 59:07Speaker 00

  A lot had to be with being in the right place at the right time. So there's definitely some luck there. I think there's also, um...

• 59:18Speaker 00

  Did it, did it take some skill? It took some skill, but it took a lot of failure. And it took a lot of learning from that failure. We call it failing forward. It wasn't just me that built, you know, it says, "How did you build it"? I don't want to say, "I built it". I want to say, "We built it". Um, and so, is it luck? Yeah, some of it's, "Thank you, Steve Jobs". You know, really. I mean, man, the guy hit it out of the park. I just followed the ball over the wall. You know?

• 59:51Speaker 00

  You know, so a lot of it is luck, but it is learning from those mistakes. It's the emeth, it's the strata process. It's all those systems and it's all those people that came into a culture that have come together to create something special.

• 1:00:09Guy Raz?

  Kurt, for all the people building something, I'm curious, like if you were sitting in this audience, you know, when you were, let's say, when you really, when you were in your early twenties and you really had this ambition of being an entrepreneur, which clearly you didn't.

• 1:00:22Speaker 00

  Yeah, yeah.

• 1:00:23Guy Raz?

  It just happened, but if you were sitting in this audience, you know, back in the early days, what do you wish you knew then that you know now that has helped you?

• 1:00:33Speaker 00

  A lot. Yeah, I think, I touched on it, right guys? I mean, I talked about really understanding what you want. Now, whether you're an entrepreneur, whether you have a job, I would hope for every one of you that you really discover inside who I am and what I want and what's my purpose and when I breathe my last breath, will it be good? Will you go, "That was great. I lived a great life." But you gotta ask yourself that question now.

• 1:01:10Speaker 00

  You gotta do it now. It's not like a savings account, you can't start saving when you're 70. You know, the most important thing is to discover what you want, because then you can build a business, you can build a life on that. I mean, it's something you can share with your family, it's something you can build those bonds with, you can build a culture on that.

• 1:01:31Guy Raz?

  Kurt Richardson, founder of OtterBox.

• 1:01:38Guy Raz?

  I spoke with Kurt Richardson at the Paramount Theater in Denver last month. By the way, the company's best-selling case is still The Defender. And Kurt says this year, OtterBox will make 39 million cases in total, or more than 100,000 every single day.

• 1:02:02Guy Raz?

  Hey, thanks so much for listening to this live episode of How I Built This. Our show was produced this week by Rachel Faulkner with music composed by Ramtin Arablouei. Our live events team includes Jessica Goldstein, Ali Prescott, Al Mannion, Ellen Jorgensen, Josh Onnule, and Marcia Caldwell. Thanks also to Julia Carney, Sanaz Meshkhanpour, Neva Grant, and Jeff Rogers. Our intern is Sequoia Carrillo. I'm Guy Raz, and you've been listening to How I Built This.