Ep10 - Fun, Purpose, and Pivots: Insights with Joe Foster, co-founder of Reebok

Episode Summary

On this episode of The Australian Business Show, Joseph Foster joins Nick Stehr to talk about the importance of remaining grounded, how to blend family and business, the value of making mistakes, becoming a billion-dollar company overnight, and their fun visit to Dubai.

In 1958, with his late brother, Jeff, Joe Foster founded Reebok, the iconic fitness footwear and clothing brand. The Reebok brand has featured as a sponsor for major sports teams in Argentina, Australia, Brazil, Canada, Chile, Colombia, England, Germany, India, Mexico, New Zealand, Paraguay, Uruguay, USA, and Wales, and has been worn by prominent personalities, including Jane Fonda, Venus Williams, Shaquille O’Neal, Ariana Grande, Gin Miller, Andriy Shevchenko, Mahendra Singh Dhoni, Ryan Giggs, Thierry Henry, Jay-Z, 50 Cent, Victoria Beckham, and Cardi B.

Timestamp Segments

·       [01:23] How Joe stays grounded.

·       [03:38] Staying active at 89.

·       [06:22] Family and business.

·       [10:30] Making mistakes.

·       [13:01] Handling massive growth.

·       [15:02] Going to Dubai.

Notable Quotes

·       “You keep friends by being friendly.”

·       “You can’t buy friends.”

·       “What were required to do, as human beings, is have fun.”

·       “Making mistakes are part of the game.”

Relevant Links

www.reebokthefounder.com.

Shoemaker: The Untold Story of the British Family Firm That Became a Global Brand.

The Australian Business Show.

Transcript

[00:02] Nick Stehr: Welcome, everybody, to this next episode of the Australian Business Show. Today, you are in for a real treat because we're speaking with the founder of Reebok, Mr. Joe Foster, fresh off the launch of his new book, Shoemaker. Highly recommend that you jump on and order that book now. I'll put the link in the comments below. This is a great conversation with an incredible man, with an incredible story. I know you're going to enjoy it.

[00:29] Welcome to the Australian Business Show. In today's swiftly evolving commercial landscape, opportunity and challenge abound. It's imperative to stay on the cutting edge, emulating the strategies of the most influential business leaders and entrepreneurs. Join our exclusive network as we unite with the world's elite. Together, we'll uncover their success stories, gain fresh perspectives on market trends, and learn the innovative tactics they employ to propel their companies to the forefront of success. Now, here's your host, Nick Stehr.

[01:03] Nick: Great to see you, Joe. Thanks so much for being on. How are you?

[01:06] Joe Foster: I'm okay, Nick. It's good to see you again. It really is. So, what can we talk about today?

[01:10] Nick: Yeah. Everyone knows, or should know, really, you, Joe, as the founder of Reebok, the global brand and icon. So, I don't know that I want to spend a lot of time talking so much about that, and I'm happy to, if that's what you want to do, but when we met, what, last month, we got to spend a little bit of time together, and I guess, one of the things that really struck me about yourself and Julie is just how approachable you are. I mean, you built this global brand, this global icon, sold it for an enormous amount of money, and yet, you've been able to stay so grounded and so, dare I say it, approachable, and normal. How did you stay so grounded, so normal?

[01:47] Joe: Well, surprisingly enough, we are normal. We love people. We love travelling and we have friends down there in Australia. You keep friends by being friendly, by being normal. I think that's so important. I know, Paul Fireman, when he got really big in America there, he used to have a gang of mates. He used to sit down there, and they’d play poker. They said, “No, Paul. We're not playing with you anymore,” and he lost that group of friends because he got a lot of money. These guys were putting a couple of dollars down here and a couple of dollars down there, and Paul, of course, had too much money, and that’s the thing. When that happens, it really spoils your life, because you didn't want to change your life. You wanted to make some money, yes, but did you want to change your life? And then you can buy anything you want, and I think, when it gets to that point where you could buy anything you want, and there must be something out of reach, and what is out of reach is, you can’t buy friends.

I think, you can make friends, and you can enjoy their relationships, but I don't think money should be anything to do with that. I think you should decide whether you want to pass it on to family, whether you want to do other things, but I think, also for us, we have kept busy. We've kept doing things, writing the book, and now, going on to survive and thrive doing that, which is a charity exercise, and also, we just like meeting people.

[03:14] Nick: It's one of the most, I don't know what the word is, I guess, that I'm looking for, but just enjoyable experiences, I think, of meeting you, because there's a lot of people around the world these days, with a lot of money, and a lot of people are aspiring to make money, and what for? I guess, because they want to have experiences, these sorts of things, but sometimes, they just get out of reach, and they forget that we're still all people. So, I really enjoyed that about you both, because how old are you now? You're 89. Is that right?

[03:40] Joe: 89. That's the number.

[03:42] Nick: People at 89, Joe, are not doing what you guys are doing. What's your secret? What do you do to stay, you obviously still stay active in the mind?

[03:50] Joe: I get this question quite a bit, because “89, why are you still doing this?” And I have an answer. Nobody told me to stop.

[03:59] Nick: So, why stop?

[04:00] Joe: Nobody said, “you've got to stop.” Why stop? And surprisingly enough, we meet an awful lot of people who are aspiring and have good ideas, want to share their ideas, want to ask a few questions, and a lot of the questions, when I ask myself the question, how did this happen? It happened because we got a lot of luck. We were at the right place at the right time. We were in running, we were in sport when running and sport just exploded, but Reebok, we never had a recession. We never had a time when sales were not growing, growing, growing, all the time, because now, we've got AI, and we've got robotics, everything has been taken over a lot of the manual stuff. Can you imagine, lawyers. Are lawyers going to be required in 10 years’ time, with AI? AI has the answers to everything, so many things. What we're required to do, as human beings, is have fun, play sports, watch sports, invent sports, do some crazy things. AI isn't there for doing crazy things. It could be dangerous. We know that. The future could be anything. It could be dangerous. It could be good. Human beings, really, we’re just meant to play, just enjoy ourselves.

[05:14] Nick: Yeah, and the fact that we can create something, like AI, that can do the heavy things, so to speak, so that we can continue to go and enjoy ourselves and have experiences. It's certainly one of the things I've learned in my journey, as well, is “why do I want to build something of significance and have money?” It's not so much the money, but it's the experiences that I can then have with my friends and family, that it enables me to have, that drives me these days. Once upon a time, it was the things. You thought it was the things, and then you get a couple of things, and you go, “those things made me happy for a very short window of time.”

[05:47] Joe: One of the things is also, if you’ve nothing left, “If I could only afford this.” So, it's a journey, and if you’ve got to the point where you just really think, “well, what's left? I can buy the best car. I can buy this. I can do this.” If you get to that point, then it's going to be sad. You've got to have things that you've got to reach out for, and you can't buy people. I think, if you want friends, it's got to be genuine.

[06:16] Nick: The ones you can buy, you probably don't want.

[06:18] Joe: That's right. Yeah.

[06:21] Nick: One of the things that can be quite, I don’t know if contentious, again, is the right word, but there's different points of view on family and business, because it was obviously, originally, your grandfather, I think, then your father you were in business with, and then ultimately, your brother, I think, with Reebok, if I'm not mistaken. What's your view on business and family, and mixing those, or not mixing those?

[06:41] Joe: It's very tough. I think, the route you take, sometimes, is not exactly what you chose yourself. Things move a little bit, and you need to go this way, or you get really busy. You're not really in control of that. You think you are. You think you're working in a certain direction, but like with Reebok, we were a running company, but when we found aerobics, we had to pivot it to become a women's fitness company, but we pivoted in different ways, and with Reebok, also, and with Jeff, Jeff loved the factory. So, he looked after the factory. We'd experienced my father and uncle, who were at each other’s throats all the time. Just didn't get on. So, the company just went down because they were not working together to build the company. They were just working. With Jeff, he looked after the factory. I looked after everything else, which was sales, marketing, development, whatever it was. That became my job, and I must have made a lot of mistakes.

Fortunately, we always had a very good relationship. We never rowed over anything. We never had a problem with that. Might have had different opinions on different things, but I didn't get into the factory and tell Jeff what to do in the factory. That was his job, and he didn't tell me what to do in what I was doing, and yet, in the factory, he would get annoyed with somebody who's working a machine, and he'd say, “go and do something else. I'll do this.” So, he would take over, instead of saying, “look. We've got to get this right, either you’re on the wrong machine, and we'll move things around,” but he would just get annoyed with them and just tell them to go do something else, and I would say, “why are you doing that?” “Well,” but I challenge him. I said, “why are you doing that?” So, I think if you have your own space, it works, but when it comes to family, when you start your business, you’re home every night, you're doing what everybody does, and then, as you get busier or things change, I mean, I was always on an aeroplane. So, I was on the plane because even when I stepped back in 1990, I stepped back from a day-to-day job with Reebok, but we didn't have computers. We didn’t have smartphones. These have come since. If I could have had this back in the 1970s, early-80s, things would have been different. I would probably not have needed to do the travelling that I did, because I could’ve had meetings, quite easily, with lots of people, all the people in America, we could’ve had meetings.

No. I had to jump on a plane, and I had to go. There's no substitute for actually meeting because you can talk a lot of rubbish and just enjoy yourselves for a while. Whereas, if you could have a business meeting, you're talking to business, but it's unfortunate that if your family are not with you on what you're doing. Julie is my second wife. My first wife, she didn't want to travel. She could have travelled, and eventually, she did travel, but that’s, when we were doing Monte Carlo, and we were doing the celebrities, and tennis matches. That was nice, and a lot of travel is not that good. I used to travel around the world and say, “well, what do you think of such a place?” “Well, I didn't see it. I’m picked up at the airport, we go to a hotel, or whatever it is, and we go and have meals at the best places, and all we're doing is talking business. Then, it's time to get on the plane again and travel.” It's difficult. You need a very understanding family because if something happens at business and they want you, you've got to answer it. You've got to do it. You can't just say “forget that. I'll answer that in a couple of days’ time.” No. Most of the time, with business, you've got to get on and do it. So, family is difficult.

[10:29] Nick: Yeah. So, you mentioned, you said, “I'm sure I made a lot of mistakes.” What were some of those mistakes, and what would you do differently today, looking back?

[10:38] Joe: I’d probably make the same mistakes. I think that making mistakes are part of the game. They’re part of business, making mistakes, but also, when you do make mistakes, don't be stupid and try and make it work. If it's not working, change. You can make a bad decision. You can make things that are not working. We had a very good friend who was also in the sports industry, and they only made football boots. They only made soccer boots. We made athletics training sneakers, the lot. So, he said, “why don't we be your distributors?” And that seemed to make a lot of sense, because they did soccer, which we didn't do, football, and we did all the rest of the stuff. So, it made a lot of sense and it worked great for us because it meant our cash-flow was brilliant, but unfortunately, the man who owned the business, he was getting on a bit, Harold Lawrence, and he decided to retire and put his son-in-law in, running the business. The son-in-law didn't get on with my friend, who was the head of sales. So, we've got with him now, my friend left, and I'm left with this company, but my friend left and took the sales force with him, and to cut a long story short, that the company went out of business very shortly after this happened because, there were different reasons, but they were not selling, and I had to go and collect all the product. They were not paying me. They stopped paying.

So, I had to go collect all the product, and bring it back, and figure something else out, but was that a mistake? You think, “well, at the time, you thought was a good deal.” As it happened, it was a mistake. Have you read the book, by the way? Shoemaker?

[12:20] Nick: So, it's on order, believe it or not, and it hasn't arrived. I've had it since before we met. It is coming and I'm looking forward to it, but at least, if I have it by the time we catch up again, when you're down under next that you can sign it for me.

[12:31] Joe: Oh, we’ll do that. There's a lot of stories in there. Just the small things which didn't go right, little things, but then we have so many things that did go right. We got Jane Fonda buying our aerobics shoe and using them in her exercise videos, and then we got the explosion from a $9 million running company to a $900 million women's fitness company in four years.

[13:00] Nick: Yeah. Well, I wanted to ask you about that, too, because I mean, growth is expensive, in business. It takes a lot of capital. So, how did you manage that process of going from 9 million, because what did it take you? 10/11 years, to get to 9 million, and then the next four, to 900 million?

[13:17] Joe: That's right. Yeah. It took all that time, and then, overnight, you suddenly become a billion, almost. Well, as you said, finance. We were fortunate, again. Paul Fireman is Jewish, and he knew a guy in the UK who's also Jewish. They got together. The guy in the UK, Steven Rubin, who, by the way, is the biggest shareholder of JD Sports. You probably know JD Sports. He's the biggest shareholder there. They're the major shareholder. So, the majority. So, they control. He was sourcing out of Korea. So, he gave us a credit line. So, we got a credit line, and they were getting a nice percentage out of every product that we made. That answered the financial side, but how do you get the product? Because we were going from a few thousand pairs a month to millions, and that was a big challenge, getting the millions of product. There was only one, again, a struggle. Nike found themselves with too much inventory. So, they had to pull out of four factories, and we needed them. We went straight into those four factories. So, the factories had a piece of luck that we needed them, and we had a piece of luck that we could now get the product we needed. If we hadn’t got that product, we would have starved the market, but we were looking at 5 million pairs a month. That's a lot of products.

[14:44] Nick: A lot of product. This particular chat, we've got a bit of a time limit. We'll wrap it up, but hopefully, we might jump on another one, outside of this. Obviously, we've connected on all the different platforms. So, if you're up for it, maybe we can jump on and do a longer chat after this, at some point. I'll get in touch with you.

[15:01] Joe: I'm sure we can do that. We should talk about Dubai.

[15:04] Julie: We went to Sushi Samba. Oh, my God. What an amazing place.

[15:08] Nick: It's good, right?

[15:09] Julie: and Sanjay was a delight. He was so kind. He came and picked us up even and drove us back. Even though we were just staying across the road, we couldn't get across the road because it's Dubai. You miss your right turn in Dubai, and it's, “hello, Abu Dhabi.” So, yeah. It was tricky. He picked us up and it was a wonderful evening.

[15:35] Nick: I'm so glad. Yeah, isn't it? It's a fabulous restaurant, and he's just a lovely guy.

[15:39] Julie: He is, and we met his cousin and all his cousin’s friends, and they were all lovely, too. They were all picking Joe’s brains. They were all chatting with him and asking him this, that, and the other, weren’t they?

[15:53] Joe: Yes, but you're right. Julie, make a connection. Then we'll get together.

[15:58] Julie: Yeah, we'll do that. No problem.

[15:59] Nick: Great to see you both. Take care.

Thanks for listening to the Australian Business Show. Don’t forget to rate and review us wherever you download your podcasts, and join us next time, as we uncover more success stories, gain fresh perspectives on market trends, and learn more innovative tactics to propel your company to the forefront of success. Thanks, again, for listening.