Episode 26: Leading a Business Through Crises

Hey listeners, welcome to SphereCast. A podcast all about technology, technology advice, technology inspiration, and how real entrepreneurs have used technology to build their businesses from the ground up.

If you're wondering how technology can support your business goals, rest assured our guests have been there and done that.

What is resilience? Is resilience grit? Is it endurance, survivability, willpower, maybe all of the above? And what produces resilience? Though the word may be difficult to define, I think we can pinpoint what produces it: difficulty, hardship, lack of control, chaos, crisis. Yes, resilience is the fruit of crisis, and some of the most successful businesses in the world have weathered these times of chaos and have become better for it.

Hey, it's Luke joining you for another week of SphereCast. And this week, Xenia and Steven speak with Brandon Mackay, Owner, President, and CEO of SnugZ. SnugZ is a Utah-based company that boasts the domestic manufacture of promotional products. Founded in 1989, Mackay's company has spent over three decades creating custom gear for businesses, events, and various other promotions. SnugZ creates most of their customizable products in-house, from hand sanitizer to PPE kits to sunscreen to lip balm to lanyards.

Brandon joined SnugZ 5 years after its inception and has shepherded the company through its highs and lows. During its 31-year history, SnugZ has lived through the dot-com bubble, Y2K, the 2008 housing crisis, COVID-19, and other difficult events. And, as you would imagine, Mackay has picked up quite a bit of perspective living through such turbulent times.

On the podcast, Mackay shares that perspective and explains how to survive and thrive during these events that are out of our control. So, without further ado, here's our conversation with Brandon Mackay.

Hi, everyone. This is Xenia with SphereCast, and today, our guest is Brandon. Hi, Brandon.

Hey, how are you?

Doing well. Thanks for joining us.

Absolutely.

I'd like to start with your current venture. Can you tell us what is SnugZ and why did you join this company?

So, SnugZ is a domestic manufacturer of promotional products. So, many people wonder, "What is a promotional product?" So, if you go to a sports event, or even go to your own company there, and you see branded merchandise with your company logo on it, that's a that's what a promotional product is. I started here early I would say in my career, and SnugZ is a second-generation company. And obviously, when I started, we were very, very small, and things have definitely changed a lot since then.

So, this is Steven interjecting and hopping in. Brandon, what year did you actually start or or found SnugZ?

So, SnugZ was founded in 1989. And I started at SnugZ in 1994, so there's a 5-year gap there that I wasn't really involved in the business per se on a day-in and day-out basis. But since it was a a family business, you know, I was able to see it optically kind of at that level.

And then started at the business in 1994 as really as just a day job as I was preparing my ultimate life goal is I wanted to be a a fireman/paramedic. And I started here in the summer and was going to go to fire academy in the fall, and never got out of here.

What business challenges were you faced with when you started at SnugZ?

I think like most startup businesses, even when they're just a few years old, there's more work than there's people. And the reason is is there's just not enough revenue to to hire the staff that you need. And I think most of our challenges at that time were were just that, is that we had a lot of jobs that needed to be accomplished, whether it was accounting, or lunch, or cleaning the building, or helping fulfill an order. And there's just not that the headcount there yet to to be able to be effective every single day.

I also noticed that you partnered with the Thermos brand logo. Could you tell our listeners more about that process?

Yeah. So, I guess one of the bright spots of 2020, the the year of COVID so to speak, is that early in the year we were approached by Thermos, which is a massive retail brand of drinkware. They came to us and asked us if we would be interested in a in a partnership with them for promotional products. So, we would take their Thermos brand product and we would put a company logo on it. It could be a Fortune 500, or it could be a sports team, it could be a college.

And they were looking for a partner that could decorate for them and help them enter that space. Lots of other drinkware suppliers have entered that space, and they wanted a chance to enter it too. So, they came to us early in 2020. We liked the opportunity. They have a tremendous amount of sourcing ability, and they have a lot of inventory, as you can imagine. And we worked hard on picking SKUs that worked for us and worked for them.

And then COVID hit, and it kind of slowed the trajectory down a little bit. But by the end of 2020, we had fully onboarded and partnered with Thermos. And and we sold more in the remaining 3 months of 2020 than they had ever sold in the previous year. So, they were excited about the the newfound partnership, and we definitely believe it's going to be a here to stay for us. And we look forward to expanding our SKU selection with them and continuing the partnership with them. They have been absolutely phenomenal, a really, really good group of people there at Thermos. And they definitely understand the the market here in the US, and they're just remarkably supportive of us.

Brandon, question on the Thermos brand and, you know, being in the promo space. I know you do a lot of your own manufacturing. Are you able to give us any any sort of insight into percentages when it comes to selling, for example, the Thermos brand from an external vendor versus manufacturing your own products and how how does that selection process look like?

So, the selection process with Thermos was them being a a retail partner and having lots of data and analytics, they really understand what sells. They understand what size, shape, price point sells. And so that data for us was extremely valuable. What we offered back to them is is saying, "All right, these are the products that you say sell, but we can't really decorate them. There's no way for us to put an image or a logo on those."

So, we kind of worked back and forth on on that aspect of saying, "We understand what sells and now let's try to figure out what we can decorate." And we came down to a selection of products that were win-win for both of us.

This was an abnormal relationship for SnugZ, since we're primarily a manufacturer, meaning that we make all of our own lip balm here. So, we source all the raw ingredients for that, we compound it, and blend it, and fill it in-house. Or we make all of our own candles in-house, for instance. So, for us to get a finished product was a little bit different for us, where we just had to put a a logo on it or decorate it. And we're excited about that opportunity. It's helped us expand into some other drinkware lines that are not specific to Thermos brand itself. And they've just been, like I said, a great partner and helped us be able to navigate into a new space that we currently were not into at all.

That's fantastic. So, I'm going to go ahead and shift gears here a little bit. Knowing that you've been in business since the '90s, which is impressive, you know, you've obviously seen and survived through some major turbulent times. Can you walk us through some of the changes that you saw take place during things like that dot-com bubble, the the housing crisis, and most recently, COVID? And, you know, what what did you see change and just a little bit of your back story and what that looked like?

Yeah. So, early years, I think when you're in a business that's an upstart or you're working in a business that has just a few years under its belt, everything seems like a crisis. And I remember that, you know, kind of the dot-com crisis being like the first major national crisis outside of our day-to-day business crisis. And then right seems like shortly behind that was Y2K and everybody's computer was going to seize up because it couldn't roll to the new century.

And I remember vividly some of those issues. But the things that I really remember in business was the housing crisis in, you know, '07, '08. I remember it in business and I remember it personally, of you know, friends and families that were suffering. And I remember listening to to local and national news at that time, and really, you know, crossing our fingers, and hoping, and praying that we had the right leadership in place that could help navigate us out of that. And to sit around and and listen to to broadcasts or listen to news clips on the on the internet was kind of was was really humbling at that time, because the the housing crisis really hurt a lot of businesses.

But I think it kind of gave us our first taste of resilience as a business and as a country. And there's been other things that have happened. But navigating or leadership of a business at that time was was very interesting to me. And then obviously through the COVID cycle, that one was, you know, it was a a huge hiccup in the road, it was but I think we kind of understood how to get our arms around what our spend was. It really helped we were really quick to evaluate what our fixed costs were, where it's and where we could trim, and how we could stabilize the business to make sure that it was going to be around here in 2021.

And those lessons were were learned at all of those stepping stones along the way. But probably the biggest issue of COVID was is getting over the initial fear of that, you know, we're all going to to be extinct, to saying, "All right, this is just a this is a major issue, but we definitely have smart people in place that help navigate."

And you definitely have perspective of of challenge going through those. Looking at, let's just say the the housing crisis versus COVID, for people that maybe haven't gone through multiple crises with their business, what advice would you give people as they're going through those turbulent times to to, you know, stick it out?

Yeah. So, I think like most, and I can't say for most, but I would say most of the the business owners that I rub elbows with or share information with seem to be use you know, like use the perspective like you had spoke about. And and try to remember that there are some skills, and there are some things that we've gone through in the past that that we can pull forward to today. And how did we navigate that? I think for us we just said, "All right, this is this is a very, you know, this is a big issue. Businesses are being shut down or businesses are being told to to stay at home."

But we lived in a business where it was kind of a little unique, where we sold a product that was in demand. So, for us it was it was less about overall life of the business, is the business going to be around in 2021. It was some of the things had shifted from previous cycles before where we were really trying to encourage and and create a safe environment for our employees to come to work, as they were uncertain about going to work and potentially bringing something home to their family. And so trying to create a safe, comfortable working environment was where we spent a lot of our time.

I appreciate sharing that. And I know we we spoke a little bit, Brandon, before we started this podcast in regards to how you've shifted your your product focus. I know most recently, the logistics of finding mass amounts of of rubbing alcohol, and and what that looked like. Can you tell me a little bit more about that, just so that the viewers can hear about that story?

Yeah. So, at the beginning of the pandemic, we were in a great position. We were in a position where we had a product that was sought after. So, we manufacture sanitizer on-site. And so we'll take the the different raw ingredients, the the alcohol, or the carbomer, and you know, obviously, and blend those items together, and and create a finished good. But we were we were in the manufacturing of the sanitizer business. It was not our top-selling product, but overnight it went from kind of a a mid-tier product to the number one product. And so supply chain was something that we saw immediately that was going to be an issue.

And we went out and we hedged on some things where we got a lot of bottles, and caps, and closures, and pumps, and and stuff lined up to to be the packaging for sanitizer. But the logistics of getting raw ingredients for sanitizer became incredibly difficult super fast. So, we were buying alcohol, for instance, by the drums and we were going from that, graduating over to buying full tanker fulls of of alcohol, and supply chain was was really disruptive there. And finding good supply chain took just tremendous effort from some really amazing people here.

Yeah. That's interesting. I mean, I can only imagine the type of paperwork involved in trying to find drums or or even tankers full of alcohol and, you know, what type of signature is required on that. So, very very interesting.

Brandon, you briefly talked about technology. As we can imagine, it was very different back in the '90s versus today. What was the largest change you experienced during this time?

When I first started here, people used to mail in their orders. And if they didn't mail them, they would send them in a FedEx or UPS envelope. And with that, they would include a, you know, a a PMT or a photo positive of their logo. And you would take that, and you would scan it in, and then after you scanned it in, you would manipulate it and size it and and get it ready for decoration, compared to where we are right now, where everything is EDI, where our customers, they transmit orders to us, the the content of those orders go right into our system and populate fields.

Their logos are all digitized right now, so we can take a a vector of their logo, and we can size it internally here. And this is happening real-time, all the time now versus we got drop-offs from our mail or we got FedEx drop-offs or UPS drop-offs, you know, once or twice a day when I first started. So, the evolution of how we receive data and how we get data into our system has just been mind-bending over the the course of my career here.

I can totally remember the, you know, the very first few days I was here of of opening up all the mail and and trying to piece together orders. And now it's just all seamless. We have EDI interchanges with a lot of our top customers right now, and and the processing of data is just overwhelmingly faster. And we went from a, you know, a 10- to 15-day turnaround time to we have 24-hour turnaround times.

What type of processes or technology have you implemented recently, or where do you see it going in the future in regards to digesting all of that data from your customers?

So, I think the big things for us inside the promo promo industry is that shifted over the last year is doing single-piece fulfillment, meaning that we used to be able to ship large volume or large quantity orders to the company and they would disperse it to employees. Now we're trying to disperse that to employees at their home right now. So, that was a monumental shift overnight, where you went from one shipper location to hundreds of shipper locations.

And then variable data. So, customers want each individual employee's name on products. And to try to process that through a system has been something that's been pretty evolutionary over the just the last few years, of saying, "Hey, how do we take a a list of names, and how do we switch that name on to every single different piece of product that we do?"

Yeah, that's impressive. Now, did you have to invest in in, you know, physical infrastructure or hardware to be able to accomplish that, or what did that process look like?

So, yeah, there's been a lot of investment in kind of that in-between software. So, you have software that is good at manipulating and sizing artwork, like an Adobe product. And then you have the the machine itself, but it's kind of that in-between, that RIP software that kind of crunches the data. We've spent a lot of time and money in in kind of that in-between engine of saying, "Hey, take the product from Adobe, translate it into a language and into a system and a protocol that the machine can interpret."

So, a lot of it's proprietary, you know, it's unique to us.

And how did you even go about learning this information? I mean, was it trial and error? Was it from a a potentially mentor? I mean, what what did that look like?

So, a lot of it at this point is trial and error. So, as you can imagine, again, you know, the there's not a lot of equipment manufacturers that are out there in the world that that help us and do what we do. So, we spend a lot of money on engineering, and we spend a lot of money on automation, and and infrastructure on that kind of on the equipment side. But equally too, you know, we spend a lot of money on on finding good programmers and people with good theory to help us be able to bridge that gap of taking off-the-shelf merchant or software and and manipulating it or using a third-party to help get it to the output that we need.

So, that segues into a little bit more of the professional personal line. So, if you were to go back, let's say 10 years, you know, what advice would you actually provide yourself that you didn't know back then?

Man. Advice I'd give myself 10 years ago would be just to is probably just like anyone, you just constantly breathe. If you knew how close you were to the finish line, you would you would always try just a little bit harder. And I think sometimes we we don't realize how close we are to to our end game or to our goal, and we just need to pace ourselves a little bit better. So, I would say probably a little bit better with patience and a little bit better with pace, um, cuz you're always so close to to whatever your end game is.

I completely understand that. You know, almost to the finish line, but you can't see it, but had you had that foresight, you know, you were almost there, so great advice. Talking about the attributes or, let's actually take a step back, looking at your your typical day, being that you are so successful, Brandon, can you walk us through what your typical day looks like?

Yeah. So, I try to exercise. I don't love to exercise. I think there was a period of time in my life where I liked to exercise and now I'm enduring exercise. But I know mentally for me, if I don't get up and I don't start with that routine every day, and and when I say every day, I guess every working day, or 5 days a week, then it doesn't get me off on the right tone. It doesn't burn off that initial kind of that nervous energy of the morning, and it doesn't give you that initial endorphin kind of kick off.

So, for me, I always have to work out. I have the luxury of, or I guess we've had the luxury of having our kids in school during this COVID year. And so I'm able to get a workout in. I have one boy that needs to be taken to school, so I have that opportunity to take him to school, and then, you know, I'm still able to get into the office pretty early. I like to have that first kind of hour in the office to kind of digest, you know, whatever content I want to work on, read up on whatever I'm interested of of the day.

And then I usually start doing appointments about 9:30 in the morning, and then it's pretty much back-to-back-to-back-to-back of appointments, or Zoom meetings, or trainings between that time and then the time I leave. Most people probably would probably admit this, but you know, I go home and have dinner and hang out with family, but then it seems like the unwinding part of the evening, early evening, you know, the 8:00, 9:00 in the hours, for me is kind of when I get those hard emails off or the things that I had to think about during the day. And and then I can kind of get my email inbox cleaned up between that time and and when I go to bed, and rinse and repeat, right?

Yeah. I love it. Now, I know a lot of, you know, myself as an ex-entrepreneur got out of that field. What advice would you give for people to disconnect? I mean, it sounds like you've you've got a healthy family life, you're able to go home and disconnect until you write those hard emails late at night, but you know, what what's your advice to people that want to have, let's say, healthy work-life balance, disconnect to be able to get those tough emails out and things of that nature?

Yeah. I think you just have to find those sacred times for yourself. And whether that's your lunch hour, or if that's dinner with your family, or if that's dinner with your friends, and just try to respect just those few moments of time during the day and and isolate that out for balance. If you're into exercise, use that time in the morning to to just kind of get going and get awake and and get ready for the day.

I don't think any true entrepreneur, at least those that I've rubbed elbows with or hang out with, are like really good about just shutting their phone off. But I think they're really good about compartmentalizing times of their day where where they're able just to set it down and be okay with setting it down, but know they're going to pick it back up and they're going to pound out the the things that they need to get done before that before it's too late.

I don't know. I think that's something that's going to be an evolution for me, too. As I get more perspective, which people could say, "Hey, you're just getting older," but as you get more perspective, you understand and you start to learn the things that are like 911, that are like emergency, and things that are just noisy.

No, and that makes sense, so categorizing, you know, what what needs to be responded to right now versus, "Hey, you know, this isn't as big of a deal as you think. It's okay."

Mhm. Absolutely.

Do you have any examples of, you know, things of, let's say 10 years ago you would have thought, "Oh, my gosh. This is a crisis," but today you look at it and it's like, "Uh, you know, this is bad, but not that bad." And I know with COVID a lot of people have been a bit jaded, but yeah, any experiences you could share?

I would definitely say things that used to just probably get my engines revving 10 years ago would be employee issues. Let's say that we had an employee that was looking to make a career move, or looking to make an adjustment, or was dissatisfied with potential position, or pay, or commission. And I've learned to kind of just let that simmer a little bit, where before I'd be like, "Let's, you know, let's get after it right now. Let's see what their doubts and concerns are. Let's solve that right now." And and today, I'm like, "Oh, let's kind of let let's let that ferment a little bit, and and let's come up with the right solution versus a rush rushed solution."

Maybe outside of an employee issue would be supply chain. Before if if something was going to be coming in late, or something got delayed, I would try to solve it right at that very moment, regardless of time of day. And now, I'm a little more comfortable of letting nature take its course. Let's get feedback, let's get some responses, and then let's make a decision. And definitely less rushing.

That makes sense. Now, on the account management side, you mentioned late fulfillment was something that once upon a time would would really stress you out. And I'm I'm assuming it still does to a certain extent. What type of tactics or strategy do you utilize when you find out, "Hey, you know, we're not going to get this order in time. This big client's not going to receive their shipment."

What advice would you give for people in that situation from a a sales or account management perspective?

I think again, with perspective and age and and time served, I think transparency is always the best policy. And for us, if we reach out immediately, even if it's a 50/50, or it's a 70/30, if we get out in front of it and say, "Hey, there's a there's a 30% chance, or there's a 20% chance that this might not work out the way we thought," is a much easier conversation than saying, "We heard about this yesterday, and we're telling you today."

And it just allows everybody to be proactive versus reactive. And so just you you don't want them to be this knee-jerk reaction. You want them to be able to methodically think through it and say, "All right, well what do we need to do? What are our options versus no options?" If I call you today and say, "Hey, your order didn't ship yesterday, so don't expect anything today," that doesn't give you any options. But if I say, "Hey, your order may not ship today, we might want to start looking at plans C B and C and D," that's a totally different conversation.

No, and that that absolutely makes sense, setting the expectations early, so appreciate that advice.

We talked about your past and present experiences. So, my next question is about the future. What goals do you have for the company, let's say, in 5 years?

In 5 years? I think our goals always, first and foremost, that number one, we want to be here in 5 years, and we want to be able to have a product that's desired in 5 years. But more so than that, I think we have definite revenue goals that we want to achieve in 5 years. And I think we want to continue to do that, and I think we want to continue to expand our manufacturing footprint here in North America.

We have a good facility here based in Utah, we have a kind of an in-between upstart satellite facility that we've started in Mexico, and that we're really excited about. And I just want to continue to see the good scaling growth of the business. And I just want to to make sure that we continue to to practice the values that got us here in 5 years. I think that's really important to me, and really important to staff, that we continue to to live those things. And I think if we for sure just live those, then everything else seems to just fall in place.

And you mentioned company values and something we didn't touch on. How did you go about defining the company values and, you know, how do you ensure your company's living through those values?

So, I think the the evolution of the value was really hard. It's, you know, it I was fortunate enough to be able to have something have someone walk me through it, and and help me establish what those values are. Because I think first you have to figure out what your own values are. And then you have to say, "Of my personal values, how do I incorporate those into my business into my professional values?"

And I was able to to take some time. It didn't happen overnight. It was really, really hard, to be totally honest with you. But we've finished up, you know, with four values that were really important to me. And then we translated those into into kind of business language or business, you know, vernaculars. And we made that kind of the the cornerstone of our our business moving forward. And and once we really established that, that's when we went from an okay company and and decent growth to what I feel like is a great company with momentum growth.

Fantastic. So, coming to the final part of our podcast, looking at technology and the future, from a tech perspective, what do you wish to see, or how do you wish to see technology evolve to make your business more efficient in the promo space?

That's a tough one. I think technology for me in the future is the systems themselves or the readers getting more intelligent. So, we have various customers out there which have different ERP or, you know, platforms that they use for their own systems and run their own businesses. And those communications between theirs and ours, I think where we'll see a lot of the evolution, that we'll be able to to take data or we'll be able to take a file from them, we'll be able to scan it and find all the pertinent content information from that file, and then it will automatically drop in to the corresponding fields within our own system.

We have thousands and thousands of customers out there, so and you know, some are on really simple platforms like a QuickBooks, and some are on super, super complex Oracle platforms. And so for us to be able to take information from them and transcribe that into our system via where, you know, it's an AI product or it's a some type of reader product, I think for us is going to be a big, big monumental move going forward.

Outside of that, I think that art service programs are getting smarter, being able to do virtuals and virtual programs by yourself, being able to take your favorite image and being able to put it on a product and have it be dimensional, three-dimensional, that you can almost understand what it is by the by the looks of it, you can manipulate it and look at it. Those technologies are really starting to evolve quickly, which I'm excited about.

Brandon, I want to thank you so much for joining us today and sharing your experience and knowledge with both Steven and I and our listeners. We wish you best of luck in your business and future ventures. Thanks again for joining us, and let's keep in touch.

Absolutely. It was great. Thanks for thanks for the questions and the opportunity.

A special thanks to our podcast guest this week, and once again to our sponsor, Sphere Partners, for bringing this episode to life. If you enjoyed this episode, drop SphereCast a five-star review on iTunes and share this content with your network.

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