Building a $500 Million Manufacturing Company
Building a $500 Million Manufacturing Company
Building a $500 million manufacturing company is not a piece of cake, however, our guest today explains how they did it.
In this week’s Manufacturing Ecommerce Success Series, our guest speaker was Carey Smith. Carey Smith is the founding contrarian at Unorthodox Ventures. Before this, he founded the company Big Ass Fans and sold it for $500 million. Carey accomplished this without outside investors with his bootstrap attitude, dedication to getting customers what they want, and developing content for the industry.
The conversation of the episode started with Curt asking Carey about his company and also how he succeeded in building a $500 million manufacturing company in such a short time. Answering this, Carey said that when he was about to start his company, it was time his previous business was almost failing.
Download our free business valuation guide here to understand more about business valuations and view our business valuation FAQs to answer the most common valuation questions.
Furthermore, adding to this Carey also said that at this time he had sufficient industrial experience and was just looking for ideas. This is when he came across the idea of selling fans to dairy farms. Here, Carey joined a company and made a deal of selling a certain number of fans in exchange for IP.
This is when he was once in a tiresome meeting and offered $400 million for the company. However, he then called 10 minutes later and changed it to $500 million. Therefore, a few months after this someone did offer him $500 million for the company.
Moving on, Curt asked Carey about one of his aha moments when he had his company. Responding to this, Carey said that his aha moment was when he first heard about this business. At this time he knew that this is what he wants to do.
Do you want to know if your business is ready for your exit or what you should do to prepare? Learn this and more with our business exit assessment here.
Further into the conversation, Curt asked Carey about the name of the company and how they came up with it. Answering this, Carey said that the size of the fans they sell is so big which is why they opted for this name. Moreover, every time someone called, they would ask if they made those big ass fans.
Considering this, they actually changed the name of the company to Big Ass Fans. By the end of the conversation, Curt asked Carey a bit more about building a $500 million manufacturing company. To this, he also asked Carey about his post-Covid working styles.
Answering this, Carey said that when you are running a business and you are working with certain people, you have to understand that you don’t know everything. Moreover, here you also have to understand that at such times you have to make sure to understand what the other person brings to your business and then work on it accordingly.
Get the most value for your business by understanding the process and preparing for the sale with information here on our Selling a Business page.
The conversation ended with Damon and Curt thanking Carey for his time.
people, fans, business, customer, company, sold, carrie, product, big, article, manufacturing, run, thought, milestones, manufacturing plant, pay, imagine, kerry, share, build
Carey Smith, Damon Pistulka, Curt Anderson
Damon Pistulka 00:05
All right, everyone, welcome once again to the manufacturing ecommerce success series. I’m one of your co hosts Damon Pistulka. And I’m going to just say welcome to 2022. So I’m going to turn this over right now to the co host, Kurt Anderson to introduce our special guest of the day, girl take it over man,
Curt Anderson 00:27
Damon Happy New Year, my friend what an absolute honor. You know, this is like 10 years in the making right now I’m not even pretend that I’m not excited starstruck as matter of fact, I think my ear my end as soon as this interview is over. So, guys, I want to introduce our dear friend Carrie Smith, the founder of big ass fans. Carrie, welcome to the program. Happy New Year, my friend.
Carey Smith 00:48
Thanks, guy. Appreciate it. Glad to be here.
Curt Anderson 00:51
This is absolutely what an honor. I’ve been following your story for many years. And so our stick here as our everybody drop a note and say hello, tell us where you’re from. We’re doing things a little bit differently. today. We’re on LinkedIn live. So let us know where you’re coming from today.
But you know, anybody in manufacturing is extremely familiar with your story, love and Time, Inc. 5000. Winner, of course, you know, any entrepreneur would love to win once you want 11 straight years, 30% year over year growth, just Monster Monster success in the manufacturing world. So I’m going to kick things off with a couple questions. What’s your secret? Man? How’d you do it?
Carey Smith 01:32
I have no freaking idea. I mean, something like that, you need to ask somebody that knows something.
Curt Anderson 01:41
So the key is just to act like you know what you’re doing. But Kerry, appreciate your humility. But let’s go back in time. So long time entrepreneur, in 1999, you had a vision for a company? Can you share a little bit? We talked the other day, and you you gave a great kind of a segue on that transition? And you had a vision for these monster fans? Can you just share? Like, how how did that happen? How did these come on your radar? And how did you make that plunge into into the fans?
Carey Smith 02:09
Well, in reality, you make it sound much better than it actually was. Maybe I’ll just
Curt Anderson 02:15
I’ve been practicing for 10 years. Yeah, there you go.
Carey Smith 02:19
No, actually where it started and where it came from was the fact that I had a business at the time that was basically failing. And I spent considerable amount of time looking for other products and and other other businesses. And I had been working for, I don’t know about 10 years in the industrial more of the industrial facility market. And I was very familiar with that.
And I knew a lot of people in that industry and what we had done prior or the that business involved cooling of these buildings in the in the summertime, because in the States, a lot of industrial plants, manufacturing plants, as well as distribution centers or not air conditioning very uncomfortable, especially in the South.
Yeah. And I came across somebody making fans, a small machine shop making fans for for dairy farms. And because a cool cow a comfortable cow makes a lot more milk. And, and in summertime, it’s incumbent upon the dairyman to keep the cows in cool. And this, this is what this particular individual at California Davis had come up with. And I thought oh my god, the answer to my prayer. Because immediately to me, I thought one it’s it was huge. They just had a little ad. And it had a picture of the fan.
Next to an individual, it was like, oh my god, this is cool. And so, I mean, I call the guys up and I said hey, it’s your lucky day. I’m on the phone with you. So it did take a little I guess I should have mentioned that in the beginning. And made a deal. And because they were having a very difficult time. They were a small machine shop and they were having a difficult time selling they don’t really know anything about business and I’m very talented but but but limited in terms of business experience. And we made a deal and I was was allowed to, to sell and market the fans globally.
And part of the deal was that when we got to a certain point when I’d sold a certain number of them And it wasn’t very many was like 1500 or 2000 novel that I had the right to buy the IP. Okay. And, and I did. And so it took me a couple of years to get there. It’s always a little slower than you imagine even with great product. So about 2003, we started actually manufacturing ourselves. And and as I said before we went from there over what’s that? 15 years to 265 million we were selling in, I don’t know, 130 countries around the world we worked quite well. It was very interesting, very exciting.
I worked with a lot of really cool people, nice people, or people. Yeah. That’s basically it. And then I got to the other end there. And in an offhand comment, this sounds so silly. But in an offhand comment, after a really nasty, not a nasty meeting and one of those bad meetings. Yeah. Where you’re like, I just, I’m i This is tiresome, I said offhandedly to my operating guy. I said, you know, God damn it. If, if somebody would give me for $400 million, I’d walk away from this. You said, really?
You would do that? I said, yeah. But then I came back 10 minutes later, and I said, you know, 400 didn’t sound right. Make that 500 I’d walk away for 500 million. And that, that honest to God, that meant nothing to me at the time. Yeah. It was interesting. It meant something to him. And so anyway, so basically, less than a year later, somebody offered me well, less time than that, but offered 500 million. Well, that’s cool. I can do something else. Yeah. These fans anymore.
Curt Anderson 07:11
Yeah. Everybody has a price. So this so a little bit of a Ray Kroc story here, you know that kind of like Ray Kroc finding the milkshake machines, you know, so like, you stand up some line, a machine shop, making these giant fans. And you know, you showed me the other day, you’re like, man, it was just a crystal clear vision. You know, you had that aha moment of like this, like, were there angels trumpets playing like, How did that even happen? Yeah, yeah. I’m curious.
Carey Smith 07:36
Interesting. And you mentioned that movie, and I can tell you that was, that was like, the they were right there with me. That was terrible. I it was, like, totally amazing, because it was so similar. I mean, obviously. Much, much, you know, did took it a lot further than I did. But you bet. Yeah. It was crazy. But no, you’re right. I felt just right from the very beginning that that it was a it was an interesting product. And based on what I knew, and what I done, I knew how to do it. And I knew where it went. And I knew how to sell it and how to market it.
And so it was, but again, that just came from, from keeping my eyes open. And but I sure as hell knew what what was going on, as I think, I’ve told people, I was going to the airport to go out and see the guys about the fan. The first time. I knew it, I knew that this was this was it, which is crazy. And I, I think I mentioned to you the other day that when I met my, my wife, I thought I’m gonna marry this woman, I have no idea why I would ever think that it was crazy. But it felt the same way. It was like, Oh, I see this. I I get the whole thing. You know? When you do that, you really should listen to that. You really should,
Damon Pistulka 09:04
that that is sage advice right there. Because I think a lot of times we hear those things, in our mind in our inner self is telling us that we don’t do anything. Right. And that’s, that’s incredible. You would say
Carey Smith 09:18
well, I’ve done it once before, and I ignored it. And I was in graduate school and and there was a there was a job opportunity. And I thought ah, I mean it was great. But I but I couldn’t I would like I mean school I mean I can’t do that. I’ve got to finish this and and and I always thought that was a mistake and I swore I would never do that again. Right?
Curt Anderson 09:41
Oh, sure. No, if you didn’t so this I love this. So again for any manufacturers out there, you know listen to the story, you know, cost some job shop kind of struggling, they just the Creator discover a proprietary product finished good. And the visionary comes in, sees the light, you know, and 1999 and we just talked about Just before you jump down those challenging times, you know, economically internet bubble was around the corner our tragedy of 911, Enron, WorldCom. There was a lot of things going on in 99. So you launched the company, you know, at that time carry? Now, if I’m not mistaken, I believe the company name was HVL. S, do I have that correctly? Are those
Carey Smith 10:20
letters? Or? She got it right the first time? How
Curt Anderson 10:23
could you please share with our audience? What is HV LS? And how on earth the biggest fans come into the picture?
Carey Smith 10:31
Well, when we started, the guys called it a TLS, the machine shop guys. Yeah. And it you know it from an engineering perspective, it’s sort of descriptive, because it’s a high volume, there’s a lot of air coming off of one of these ends, right? And the main reason is because the wingspan was 2024 feet, right? And the prime mover, the driver, the motor is only like a horse, a horse and a half. So very little power input, huge output. And so it kind of from an engineering perspective made sense, because it was very high volume and moving at a very low speed. I mean, sort of, if you imagine that glider, and and that was basically the concept.
And so when we started, of course, that’s what we call it. And we would get calls. And, and there was only a couple of us, and we’d answer the phone and say, Ah, pls Fan Company can help you. And inevitably, there’d be a pause. The go, are you those guys make those big ass fans? Yeah, yeah, I guess. But it was. So it was obvious so quickly that that’s a much. Yeah. And, and so. And so we it was it was a cool thing, because it was the customer and potential customers that were telling us. And this is like, this is like marketing research. Gold. I mean, you know, yeah, yes, it is telling you what to do.
And in reality, honestly, I think that’s an important thing about manufacturing and business in general, is the closer you stay to your customers, the better shape you’re going to be in long term. Because they’ll tell you what they want. If your customers aren’t telling you what they want, or if you think that you know, something that they don’t, it’s probably not the case they we listen to the customer, not just then. But throughout the history of the company. And I think it it definitely bore fruit. But what was funny about it, obviously with the name, like biggest fans, yeah, we were we got a lot of pushback, which was hilarious, because we didn’t care. And it made it even better.
But our Yeah, this is another point. We knew our customer, our customers, typically more maintenance directors. Yeah. Maintenance supervisors. And those guys, they run a manufacturing plant. I mean, they really do. I mean, they do president the company. He didn’t know I can tell you. Right, he didn’t know what’s going on. Yeah, it’s just the way it is. I mean, you have to do a lot of different things. And but the guy, the maintenance, the maintenance guy, they know how the whole thing works.
If something breaks, they know how to fix it, they know what to do to keep everything running. And so it we were, we knew that. But we also knew that sense of humor, and that sense of humor is kind of my sense of humor, too. And so it matched that, that I was a great name, they thought it was a great name. And and then I think the other thing we did was, we made sure that when we were running the company, just in general that we we were very open with with not only our customers, but our people that work with us and our suppliers.
And, and we had a lot of fun. I mean, we used to buy Well, we got to open bar, we did all sorts of silly things. And I think a lot of those guys, they’re smart guys, the maintenance guys, really smart guys, but they oftentimes aren’t in the working situation that they would probably deserve. And they got a kick out of the way we did business. And so there was sort of this, you know, we like you we like the name. And of course you have to live up to that. I mean, you have to Yeah, that is like you really have to work on it. And we did I mean, it gave us that opportunity. But but it all came together it all work because we were we were firing on all eight cylinders.
Damon Pistulka 15:00
Yeah, and when you think about it, I can just imagine maintenance guys across the country, being in and running plants and building them and everything. You can just imagine a maintenance guy look at it and going up, look at that, hey, that’s the biggest fan. Oh, they did it all. And I did it. The first time I saw him, I was like, that’s the biggest fan. And then we proceeded to put them in every manufacturing plant I was involved with after that, I think because they do really do a good job. And like you said, that that catches the attention. But then behind it, you just said we got to make a good product. And it is a good product to sit there and run and run and run and run and run. Because
Carey Smith 15:36
I think we warranted them for 10 years. But I mean, we’ve got them here where I am now. In Austin, there’s, there’s the original fans. I mean, they’re 20 something years old, right? Yeah. So it’s a very long lived, but that’s what we wanted. I mean, we were selling something. And we told them, this is the this is the last fan you’re ever going to buy for real. I mean, any any consumables, I mean, we weren’t trying to, you know, make a business out of that. We were just trying to do it better than anybody else could do it. And we did.
Curt Anderson 16:10
Security, Bernie so so again, put yourself back in your shoes 1999. So any manufacturers that are out there today, maybe you know, COVID has hit them hard, or they’re struggling or you know, their custom job shop, and have you know, and again, you’re incredibly humble, but you really are a monster storybooks success.
You know, there’s a big reshoring initiative, trying to bring back Made in USA. And again, you are a great story and an inspiration for many entrepreneurs and manufacturers out there. What piece of advice would you give a young manufacturer it’s kind of either starting out or maybe you know, had some real severe challenges during COVID? What would you what were some pieces of advice that you would give that manufacturer?
Carey Smith 16:51
I think that outside of what I mean, and they know their business much better than than I would ever know it. But if it’s something where you’re thinking I Were A, for example, a machine shop, machine shop, guys that run machine shops, I mean, crazy, crazy smart guys. Yeah. And very creative. They have to be because that’s their business.
Yep. And the problem, again, from an entrepreneurial perspective, is they I think that they, they can certainly come up with solutions, they can certainly come up with products. And I think ultimately, the answer to to reshoring a lot of manufacturing is probably is probably resides in in people like that. The thing that I think it’s important to realize what you don’t have what you don’t know, and that is business and business. We deal with a lot of doctors, for example, and a lot of academics. And it always fascinates me that they’re I mean, these are, these are smart people.
Yeah. Probably not quite as smart as they think they are. But they’re smart people. But I tell them, I say I’m not a doctor, I’m not academician and do your, but you just don’t even know anything about my job. And if we’re going to work together, you’re going to have to realize that, that I know something that you don’t know, right. And that’s not a bad thing, that’s a good thing. Because here we are talking to one another. And I think a lot of people that run small manufacturing small machine shops, they have the wherewithal they have the the talent to, to to innovate.
But they have to recognize and they have to, I mean, you know, they have to find somebody and look for somebody that that knows the other half. I mean, it’s silly to imagine that you’re you’re if you’re a engineering a product on the one hand, that that you’re a natural for writing these long articles that I did, are finding, I mean, all of these all of these really arcane, maybe not so interesting things. But I mean it’s a it’s building a business, I think at the end of the day is a skill and it’s a skill that that that is not necessarily thick that you find all over the place.
I mean, it’s just not a natural thing because it takes it takes a lot of experience. And as we discussed the other day, I had a lot of experience. It wasn’t success. Well. I mean, I feel like crazy. I don’t even talking about it. I said I wouldn’t talk about it. But but it it’s a different it’s a totally different thing and yeah, and and I think you have to take advantage of that. I would never try to to to insulate In your product or our war, run a CNC machine. But it’s foolish if you imagine that just because you can do that, that you can that you can run a startup is.
Curt Anderson 20:16
Exactly and I appreciate you know so again you had previous business prior to launching HV LS and then you know evolved into big ass fans you shared you know you did a lot of Know Your Customer you were intimate with that customer listening to the customer you talked a lot from a I felt you’re a pioneer from a marketing standpoint. You said you’re very aggressive with articles way before digital was even a thing?
Sure a little bit like so these job shops were you know, custom manufacturers man their their their widget experts, like you said very creative. But man when it comes to like putting out you know what we’ll call content article, they’re like, Man, I would have gotten to journalism school if I wanted to do that. What advice do you have for folks like how do they get that story out there to collaborate, connect with ideal customers that type of thing? Like, what were some successes that you had early on? predigital from that content standpoint?
Carey Smith 21:10
Well, honestly, I did. I wrote, I spent, I spent a lot of time writing and and I’m a slow writer. And I’m a slow editor as well. And and it took a lot of time, but but the fact of the matter is I understood the product better than anybody else did. Yeah. And I understood the problem that that product solve better than anybody else.
And so it was, it was incumbent upon me, I couldn’t ask somebody else to do it. And who would want to do it, and I wasn’t gonna pay him because it couldn’t afford it. Yeah. And, you know, it’s just, it’s just one of those things, you have to sit down and you have to do and it’s, it’s a total pain. Yeah. But the thing about it is, there’s what’s what’s good about it today, I think is there’s more venues, there’s more opportunities to offer this type of work, because it is work.
And what I’ve always found, and the media is no different from anything else, is that they really appreciate it when you do their job for them. And, and again, you have to treat you you have to talk to them and be with him just like your customers, because they basically are your one of your customers. And you have to know what they are looking for what would help them in their day to day because a lot of people that do that sort of work, they’re really not very well compensated. And they really are overworked. When we were dealing with the print media, we actually did it to the extent that they would call us and they would say, hey, Carrie, I had somebody fall out.
Do you mind? You know, can you fill something in here? Can you write an article and this is what we’d like to, you know, this is it, it was always about the product, our product, but whatever the angle was, and you have to be willing to do that. And if you do, it pays off. And and but again, it’s just it’s it’s paying attention to who the who your customer is. And in that in that situation, that’s who your customer is. The media is super important. I mean, you have to they they are channel in in doing this sort of thing. They are channeled to the to the customer.
Damon Pistulka 23:39
Oh, yeah. You know, one of the things you mentioned when we were talking earlier is and I we got a lot of manufacturing people that listen are on here and you can see the comments rolling from but you said that you manufactured most of your stuff three days, within three days prior to sale. That’s pretty amazing. And what you’re trying to do there? Well, we
Carey Smith 24:01
did I say that that’s not maybe not exactly right. I mean, what we used to tell people was that if you ordered a fan before noon, we would we would be on the road after lunch. And so it was very fast now we had in but we were in a situation where it was always a seasonal foresees than we would have liked Yeah. And so we were able to build in the in the winter. But but a lot of it was you know, and especially when you get into the commercial fans, commercial fans is something different because now you’re selling, you’re having different paint jobs, different finishes. It’s a little bit of a different business. And you have to be able to turn that around but very hard to do that of things. So
Damon Pistulka 25:00
Yeah, well, that’s something I’ll because that’s quite an advantage. It’s quite an advantage, speed.
Carey Smith 25:06
Speed. Now it’s very important. I always thought it was very important. And it’s hard. It’s hard. We tried, we actually did try to do, you know, Polo. We had a lot of people around Lexington that were engineers that were involved with the automotive industry because of oil, yada. And of course, all of the auxilary. Plants and so forth. Right associated with that. So just in time, I mean, you know, that’s like, that’s the thing. And we tried and tried and tried. That’s, that’s hard. Yeah. Doing. We it was it was hard, hard.
Damon Pistulka 25:43
Yeah. Cuz you’re selling it, you are selling a custom product, basically. But it was probably made up as standard kind of pieces and stuff like that. But, but it is. But I mean, just to be able to say that most of your stuff, that what you said now is even more impactful to me that it was earlier manufacturing three days, but if you ordered before noon, and your fam went out that afternoon, that’s that kind of speed. Gets you market share like crazy.
Carey Smith 26:07
Oh, it’s you’re right. In the beginning. We didn’t of course, we didn’t have any competition at all. Yeah, yeah. But as time progressed, it was funny. How the people that came into the market, how because I don’t know. They just didn’t pay attention, I think. Right. And so one of the big deals was I mean, they’d say, Oh, yeah, well, we can get you a fan in two weeks. And here’s the the the leader industry thing. No, it’s this after and what the hell is that? Yeah, yeah. And I think that was that was.
That was, that was a big, big feature. I think, especially in the summertime, they would do this in the summer, if you can imagine that you get you order a fan, you call me the first and they say, oh, yeah, it’ll be you know, it’ll be sometime in June. Yeah. And so we were able to make a big deal out of that.
But yeah, that’s just investment. And that’s just understanding your customer. And that’s yeah. And I think, again, we sold everything directly to these. I mean, if you, I don’t know how you ordered your fans, or how you bought them. But typically, if you if you called about a fan, if you email you email to the factory, yeah. If you called you called, and you spoke to somebody at the factory. So it was very, very, very direct. Yep.
Damon Pistulka 27:32
That’s how it was done. That’s how it’s done. And it’s funny, you talked about this speed, though, because last night, I was I interviewed Brian Bandag from Cavalier tool up in Windsor, Canada. There. He said, they’re the 26th, largest injection mold builder in the world. So cool company, but he was talking about speed to market. And he said how much it’s helped him because when you look at their, their equipment and what they do, he said that and they build big molds.
I mean, like when you think the inside of a dishwasher in one shot kind of thing. And he was talking about building those molds in 12 weeks, and I used to be in molding. And that’s where I got exposed to your fans and those kinds of things, because it’s a hot environment. But that stuff used to take six months, eight months to get done. And they’re getting it down in three months. And you know, but he was talking about the same thing. Speed is valuable. And
Carey Smith 28:24
yeah, because you’re again, and I think the customer appreciates that. I mean, you when you put yourself into the customer’s shoes, you go well, if you want it in six months, or he wants it in 12 weeks, I mean, yeah. I mean, if it’s not important, he’ll tell you, or she’ll tell you, but, but when it’s important, I mean, we order schooling all the time. And, and when you need it while you need it. I mean, yeah, right. That’s just the way it works. Yeah.
Curt Anderson 28:52
So Carrie, so again, so things off in 1999, could you share, like, was there? Were there any milestones? Were there any points where you’re like, I think I’m on to something you like. So there’s plenty of entrepreneurs out there and maybe built a six, seven figure business maybe like those that even make it to like eight is a monster milestone to break that $10 million threshold? Was there certain points or milestones that you discovered in the 2000s?
Were like, I’m really on to something here. Like again, and again, you express your previous career where, you know, there were some struggles, challenges, so on so forth, you know, how you know what, describe what that looked like in the 2000s as you were starting to hit these milestones.
Carey Smith 29:33
Well, I don’t recall the there was a specific milestone, I think, other than just sort of oddball things like the first time we sold. We sold a number of fans to the Philippines to dole pineapple in the Philippines, and I think was 12 or 13 of them, which was a big deal. To us. Yeah. All right, well imagine that that is halfway around the world. And so imagine that, that what we’re doing that it penetrated after a relatively short period of time several years so that so that a plant manager, plant director in Mindanao Philippines would would know who were and know what, what they want it. Right. And I think that was a big deal. And then,
Curt Anderson 30:33
I’m sorry, do you know how do you translate big ass fans in the Philippines? Do you know like, how that translation work? Countries,
Carey Smith 30:40
big ass fans? We sell these every place, right? And people would ask, Well, what about this? What about that? And it’s like, god damn it. Most people understand this. I mean, it’s a big ask. I will say that. The our, our best market hates and actually per capita was the best market was Australia. And, and the the Ozzy’s we were we were in line with. They got some big hot it totally. Yeah. But yeah, so that never gave us a problem. If it did, it was a good thing, because we liked it.
Curt Anderson 31:20
Right. So then, I mean, I think if I interrupted on any milestones, but were there any other turning points that like, you know, the recession hit 2008? Were there other points where you’re like, man, like, this is really turning into something I you know, did you ever dream that you’re going to build this size of a company?
Carey Smith 31:37
I think that that one milestone did occur after it was 2010. Because we hit 50 million. And I thought for whatever reason. I thought that was a big deal. Yeah. And, and we were able to do that. And then we in terms of others, I just interesting things. Nothing really I this is, you know, there was you. We worked. I mean, this is I think I mentioned to the other day, people come to me and say, you know, oh, I’ve got a business. Oh, it’s so much fun. And you go and you’re having fun not doing something right. away, it should be done.
It ain’t fun. No, it’s work. Yeah. I think that there’s a feeling of accomplishment. And I think that’s good. Yes. And we always tried to have fun. And I think that that that we did I mean, we took it seriously. But I don’t. I haven’t fun. I mean, that wasn’t that wasn’t really part of it. But and we plowed in again, one of the things I mean, we bootstrapped it. Yep. Which is I tell you, it’s a it’s a different, it’s a way of doing it, it doesn’t mean the way to do it, because it took it took whatever that is 19 years, or 18 years. And I think that if if I had been more savvy financially, then we could have done it faster, and maybe much better. And and so there was you learn a lot when you’re doing it.
Right, yeah, but it you pay a price. Of course, at the end of the day. I mean, when and this is what I try to impress on people that, you know, young entrepreneurs is that when we got the check when we sold it, it was it was my check. I mean, it was made out to me personally, we gave I gave 50 million of it away to people that work with me because that you know that we had programming we did that and we made a lot of millionaires and and, and people were that actually use that money that they made and some of them it was I don’t know how many were multimillionaires, but it was you know,
Curt Anderson 34:11
Carey Smith 34:13
And they actually started their own businesses which I which was cool, right? Very,
Damon Pistulka 34:19
no doubt, no doubt.
Curt Anderson 34:21
So what would I love to transition into Carrie? So again, so anybody has just joined us Carrie Smith, founder of big ass fans, you are now currently the phony contrarian unorthodox ventures but to touch on that for in one second before we get there. So again, Carrie Smith bootstrapped a company founded a fan manufacturing 1999 at zero built it in $300 million company blessed fortunate sold it for half a billion dollars. Here you and I know you take you mentioned about writing and guys if I’m an Ink Magazine junkie, and man I was thrilled when you started writing your monthly articles. So Carrie writes about monthly article that is absolutely fantastic, fantastic.
Look forward to reading that every month is matter of fact, we have Scott, the editor scatto, the editor in chief of Ink Magazine as our guests a week from today. Talk with Scott the other day, so he was thrilled that you’re on the program today. But Carrie again, so for those manufacturers out there, you know, the stories, you had the foresight, you had a vision, know your customer, you spoke their language, I mean, you’ve covered you know, high engineering, you’ve covered a lot of great topics here, share a little bit on your leadership skills get I know you’re very modest.
But there’s a wonderful articles on how, you know, you were adamant you paid your folks 30% over federal rates, so on and so forth, you made multiple, you know, multiple millionaires, when you sold the company, what, again, from your previous life, rather, you know, what led to what helped you with your leadership skills. It took a great team to build this monster company, what how do you and I know you’re modest, but please share with us what were your leadership traits and skills that helps you build this company?
Carey Smith 36:00
I think the most important thing, always, and I don’t know, precise, I mean, it might come from kindergarten. But is that is that you, you empathize and you have to realize that that your that if if you can induce people to work with you, and for you, you got me, you can always make the make people work for me. But induce them to to to, you know, to join this journey and to and to be a part of it, you have to treat them, you have to treat them with respect, you have to treat them with the respect they deserve.
And there’s no way and one of the good reasons that you should do that is there’s no way that you can, that you can say that your customers number one, if you’re not treating your employees the same way. I mean, you have to yes, they’re actually on the line. And, and they know what they know it, they, they are the that’s where it all comes together. And they have to know that they’re special. And they also have to know how you expect the customer to be treated. And we were very, we were focused, I always told everybody that, that we had to make money to stay in business, but we weren’t really in business to make money. Which is, you know, that’s nice brew.
But, uh, but when it comes down to a specific customer, and let’s say a problem, you have to solve that problem. You can’t, I mean, you could have sold a fan that cost 1000 bucks.
And it cost you $20,000 to fix it because you see something up or something’s gone wrong. Well, that’s just the way it is. And, and I made sure that, that the people that work with me that were interacting with these customers knew that I mean, it didn’t bother me, you couldn’t. It didn’t, it wasn’t like oh my god, you’re going to get fired because you lost money on that deal. I don’t care about you. I mean, what I care about and what I cared about, and consequently, what they cared about, was that customer and that customer relation, even if that was the only fan would ever sell those people.
And I think that that that that sort of thing starts Yeah. And and you have to have to if that’s the way you’re going to approach business, you have to live that and you have to live it all the way down. And everybody needs to know that and so that’s so you look at someplace like Boeing, and you think that’s not the way Boeing runs and I realize it’s got a lot of financial guys who don’t know, Jack about running a business but but I mean, at the end of the day, everything, everything starts up everything.
And so the the culture, if you’re you can’t have a company that has a positive culture if you’re not a positive influence and you don’t treat everybody in a positive manner. So you’re right we did we did. I know that PE companies that thought the PAM company if they thought we were crazy, I’m sure but we did pay 30% On average 30% More than was an average over the US for what you’re doing 40% over Kentucky so we we always pay more.
We always have bonuses. The only year we didn’t have a really decent bonus and a decent bonus to me is a month’s plus salary. is in that 2008 A two a time. Yeah. And we were only we we made a million dollars. That’s all we did. And we had bonuses but could only pay, you know, like between 500 and $1,000 to everybody. But what was interesting about it is with that, was that I apologize because, because I mean, I know all these people, and they worked for me for a while, and they know what the bonus is because it’s a big deal.
Yeah. I felt like geez, I’m, this is terrible, but I, you know, that’s all we got. And to a person. They said, Don’t Don’t worry about that carry. I mean, we’ve got jobs. I mean, that’s the important thing, because so many people have been laid off. And I just I don’t know it to me. It’s, it’s, it’s running a company is tedious. In some respects, in other respects, that’s of real intellectual challenge. But I think that it’s impossible for one person or a couple of to do you’ve got to engage. Everybody, and I mean, everybody. Yeah. For the guys, driving the forklifts. The guys cutting the foils, I mean, doing packing the boxes, that’s what Yeah,
Damon Pistulka 41:05
Curt Anderson 41:07
I want to transition into. So when you sold the company, there was a phenomenal article. And I think the title was something along lines that why I sold the company to the most boring people on the planet. Do you remember that article? So I have that title.
Carey Smith 41:23
Your parents people by the company, so they were fine people
Curt Anderson 41:31
that so I think if I if I’m close, I haven’t but what I absolutely love and I use your I quote you all the time on this team, and you’ve heard me use this quote. So you know so many people, you know, you put your blood and heart sweat, blood and tears into your business. It’s your baby. You’re so emotional, and Damien’s an exit strategy specialist and Daymond you know, how emotional people get when they sell their business?
Right? And Carrie, you have this awesome, amazing quote. And you said, you know, hey, taking care of my people was number one, and you did that you walk the walk, you know, talk to talk, walk the walk there, took care of all your folks. But you said you know what? It’s my pack of gum until you pay me then it’s your pack of gum. Sherman, like what was the psychology of like, you know, like, you just didn’t care. Like, I know you cared, but like, you, you remove the emotion. Can you just so for folks out there that are thinking about selling their business? Can you just share, like how, how you took that approach?
Carey Smith 42:27
Well, I don’t think it’s that that hard, I think that to decide, and again, counted, the number that I picked was a it’s it was really silly. And when I think about it today, I think well, maybe you should have put more thought into that. But it was, it was the number that I really at that point. I didn’t care and yeah, yeah. And we got there was some dickering about it. And then there was some, you know, some phone slamming and some desk pounding. Yeah. to even come off a little bit. I said, Why don’t you go? Go? House, I don’t give it I don’t give a damn what you do. Right. But your company, and that’s it. And that’s fine with me. I don’t care.
And I think that a lot of people get emotionally attached, not maybe not to the company, but but emotionally, they get attached to whatever that number is. And you have to keep in mind that when people are doing this, on the other side of the table, they know this stuff, they know what you’re thinking. And they they want you to think about it, they want you to imagine something away from the company. But I never did that. I and I was very lucky. And maybe this is the part of the answer is I had a guy, my CEO, and I said look, you do this stuff with and he was the financial guy in the background. And I said you do this stuff. I don’t want to have anything to do with it.
And, and somebody’s got to run the company and I’ll run the company, you run this. And if it works, that’s great. If it doesn’t, I don’t care. And and then I’m running the company. Um, we didn’t we didn’t we didn’t miss a beat. And I don’t know that seemed to work. And then the other side of it would say or put into that was when I went home to my wife and said, Oh, you know, Nancy, we we’ve got people that are interested in in paying $500 million for the company. She’s like, Yeah I gotta go out. I gotta get some bread. Yeah, exactly. And it’s like, Oh, okay. She didn’t she didn’t buy into it. Honest to God
Damon Pistulka 44:53
until the till the wire the wire hit the account.
Carey Smith 44:57
In I’m not kidding. I’m kidding. That’s the way it was. Yeah, right.
Curt Anderson 45:01
That’s, that’s incredible. So I want to be mindful your time, generous with your time. My last question that I want to share. So you, man, God bless you. Thank you for sharing this, this incredible, wild, massive success story. And again, I know you’re super humble and modest about this, but you are truly an incredible inspiration to probably literally millions of entrepreneurs, let alone manufacturers great, wonderful success story.
Leadership took care of your employees built a product from scratch. We’ve made our low Ray Kroc analogy, share a little bit about So now you’ve made this transition, you sold your pack of gum. And now talk about, let’s hear about unorthodox ventures. What’s going on there types of businesses that you’re looking for anything that you want to share on what’s going on in your world right now. I know you’ve built an amazing team, it looks like some of your alumni from big ass fans are actually with you at unorthodox ventures.
Carey Smith 45:54
We’ve got a very strong team just because they’re they’re the they were the best and the brightest. Yeah, are some of the best and the brightest at the red Fan Company. And well, what we what we started out doing as we thought we were, we were going to be investing in companies be a venture capital company, which I do nothing about. Absolutely, yeah. They when I found out that that’s not what you want to do. It, we discovered that most of the people, or a lot of people in the venture capital business don’t know anything about business.
And it’s they have access to an incredible amount of money. And they’re typically bankers. And and it’s, it’s crazy. I mean, it’s totally crazy, because you’ve got, you’ve got people asking for money, they don’t even know what they’re going to do with they have no idea what to do. And it’s and they’re given money by people, almost clueless boneheads, and, but, but they but those people, the VCs are beholden, I mean, they have a fiduciary responsibility to the investors to dispense with this money. And I can only I guess I kind of feel sorry for the investors.
But again, as I said before, it’s this massive redistribution of wealth. So it’s like, yeah, okay, so fine. I mean, that’s, it’s better than a revolution. I mean, these these guys, I mean, this is like, sort of, I mean, you You’re, you’re gonna, by the, by the rope that’s gonna hang you from, from people that are going to hang. Yeah, I mean, it’s crazy. But But it turned out that it took us a little bit of time to figure out exactly what we wanted to do and how we wanted to do it. And but what we’re engaged with now are basically manufacturing because we, at the end of the day, when we started, I said, Well, that’s all we want to do.
I mean, we want to we want to find manufacturing firms that you know, various sizes that we can that we can invest in that we can help on the marketing side help on production side, because we have engineers, production guy, experts, sales expert, you know, all the supply chain, all of this stuff we can help and but they really honest to God, from from an investment perspective, not a lot of manufacturing companies in the States. And so we got away from that a little bit, but but then we’ve come back to it because it really is the most interesting, from our point of view, the most interesting part of the market.
I mean, we invested in some in some CPG and some consumer products, which are just, I mean, that’s a crapshoot. I mean, that’s ridiculous stuff. I mean, and and do you really, honestly, do you really want to own 35% of a potato chip company? I mean, really, I mean, you’re gonna you’re gonna tell your mom that’s what you did. I mean, yeah, not I’m not that interested in that. And, and so we’ve gotten back to more of manufacturing and we’re working with a company that makes up a Santa hand sanitisation unit that is that is incredibly well designed and made in this country.
That’s the other thing that we’re all because I’m not doing we don’t want to do business with somebody that imagines that they can get it done in China. And I think that Chinese people are wonderful people but the government is I mean, you don’t want to deal with them. Additionally, you’re half a world away from your production which means that your quality control is almost non existent. Your your weeks weeks months now on the water. I mean, it’s a ridiculous situation. Yeah.
I’m, I think that based on what we did with the fans, and I think the same thing is true about the manufacturing that we’re involved with here with the hand sanitizer, that is very high end that is very, very durable, metal, aluminum cast aluminum product that people are willing to pay for quality, if you give them the opportunity. I mean, and if you don’t go to Amazon, which is my thing, which I’m not a big fan of, I mean, we sell fans to Amazon, of course, but Right. But they really do take it out of a lot of a lot of small factors. And if you don’t believe it, well try it, you’ll see it right.
Yes. And, and if you have a really good product, then they’ll knock it off for you. Because they know Chinese better than YouTube. And so we’ve been more involved in, in actual manufacturing, and in helping people manufacture hard goods. Okay. And so that’s cool. It’s kind of sort of me, you know, what we spend our time and when I talk to people, it’s a lot of it has to do with, even in, in med tech even in things like that it talking to people that are more medically inclined, or more, you know, the doctors and so forth, about production and production lines and, and supply chain supply chains, big supply chains crazy.
Yeah, yes, pretty difficult, but very difficult right? Now, if you really do, we have one one of our partners, and he just, it just scares me to death. That they’re the, they you have to pay so much attention to the that and you have to get so far ahead of it. I mean, you have to fix six months, nine months, in front of yourself there. And that’s not just I’m not saying Oh, you’re gonna make it in China, because they’re not making in China. But it’s just everything else. I mean, it’s just, it’s all sorts of things. Or components that are made in this country.
Curt Anderson 52:19
Right? Oh, yeah. So
Carey Smith 52:23
it’s hard. And and, and I think that if you haven’t done it, you don’t even know. We’re trying to help people that haven’t done it. And or that have started doing it. You know, and making maybe prototypes, or making actually a product and selling it. But need to make to step up from that. There’s just a whole lot of things that go together.
Curt Anderson 52:47
Right, for sure. There are a lot a lot of moving parts. So very what I’m what I man, this has been phenomenal. Yes. I can’t express what a gift this has been spending time with you. You’re very generous with us today. I want to wrap up on on this. So combination things guys. Connect with Carrie on LinkedIn. First and foremost, number one, number two, check out his website.
Amazing team. Like he said he is doing some really cool work helping us manufacturers move the needle. So aspiring entrepreneurs, folks that need a mentor folks that need some funding, you want to check out unorthodox ventures. And what a great mentor to have somebody that’s walked the walk talk to talk is built a $300 million company. So who gets a multiple Daymond on a manufacturing business off of revenue for
Damon Pistulka 53:38
Curt Anderson 53:39
That’s okay. And Carrie, I want to close out on this, you know, I again, I’m an avid reader of your articles been big fan for many years. And failure isn’t as bad as not learning from failure is not as bad as not learning from it. That was a recent article of yours. Grow it like you mean it. So the so again, guys, if you want some great inspiration, inspirational reads, go to Inc Magazine, check Google get Kerry, check out his articles go to his website, Kerry, any last parting thoughts that you want to share with everybody out there for as we kick off? 2022?
Carey Smith 54:15
No, not really. I mean, I think I would look forward to this. I think that it’s it’s interesting, it’s only going to get better. Yeah. And I think you have to I was just thinking what’s the most important thing the one thing that we tell people when they well the two things one is we say raise your prices start just raise right and then secondly is make a make a business plan and don’t make it from the top down. And don’t use percentages. I mean, actually think the whole thing through, walk it through Week by week, so you can get a good feel of where you are and what you’re doing what you actually need to run your business. Right. Yeah. Awesome advice. This
Curt Anderson 54:55
is awesome. And I looked in last thing you had an awesome article about the trip. I think you bought some Jim equipment, and you just shared an incredible story on basically what how not to treat the customer. And that was really an article.
Carey Smith 55:07
That was crazy. Crazy. That’s a year that was put together wrong. I mean, we’re moving right now and we have to take it apart. And maybe finally we’ll get it put together, right. Oh, my
Curt Anderson 55:21
Well, guys. Thank you, Carrie. Thank you. God bless you. Congratulations, you and your wife, Nancy, for all your monster success. Thank you for sharing your inspiration with us guys. Again, follow Carrie at Ink Magazine, connect with Carrie on link LinkedIn. So guys go out there. What a great way to kick off 2022 is going to be a monster year. Congratulations, everybody out there. We made it through 2021. Let’s go out there and keep crushing it. Carrie, hang on with us one second. And guys, we wish you an awesome weekend. God bless you. Thank you for joining us today.
Damon Pistulka 55:53
Awesome. Awesome. Thanks a lot. Carrie. I just want to thank everybody out there that was on there. If we didn’t see Carrie the comments were going wild. They’re gone wild in this thing I want to just say Dan, John, Gail, Ray, Matthew, Don, Margo, Christina, Chris John. And I know I missed another rave. There’s I missed so many people. But thanks so much for stopping by. And Kerry, thanks so much for being here. We’ll be back again next week. We’ll talk to you soon.
Schedule a call to discuss your business goals and answer your questions on growing business value, preparing for sale or selling your business.