Growing Profitability featuring Brian Garofalow of Skullcandy

[00:00:00] Taylor Holiday: All right. This is an incredibly overdue episode. I don't know how, we've never done this. This is kind of blowing my mind. BG and I are currently standing about. 22 feet from one another, although you can't tell because we couldn't figure out how to make the incredible Skullcandy studio service both of us at the same time, or at least I couldn't, 'cause my technical skills are limited. 

But I'm really excited to finally be joined by Brian Garofalow, the CEO of Skullcandy, and one of my closest friends and biggest career advocates. BG, good to finally have you, man.

[00:00:34] Brian Garofalow: It is fantastic to finally be here 22 feet away. 

A very specific measurement, but yeah, long overdue. Excited to be here. Taylor. Thank you very much. The feeling, you know, is very, very mutual. I've been in awe of your career and see you go from a, what if guy to an incredible thought leader in the space of e-commerce.

So I'm more than humbled to share, share the mic with you.

[00:01:00] Taylor Holiday: Thank you. Thank you, sir. So for those of you don't know, CTC exists because of BG. In a roundabout way. When I was working at the last agency I was employed at, which is now Vayner, an agency that is now Vayner Commerce he came to my founding partner Jordan Palmer, with an idea for a brand. And his idea was a brand that is still someday gonna come to fruition.

It's our shared. Vision of a business called the Maple Union. We won't go down that road today 'cause it's coming soon and we're gonna save it for that time. But he brought the idea to Jordan. My, my founding partner and Jordan brought me in on the project and I got a chance to meet BG and we got to work on a, a exciting idea together that ended up not happening, but that was the start of the relationship that Jordan and I turned into Common Thread Collective.

And so I owe a lot. In addition to that FC Goods which was the start of four by 400. And really that vision was an introduction. It was a gift from BG to me for my 30th birthday. So, so many weird intertwined roads. Are you looking around for years? That we share, including now sharing an office together and getting to work together all the time.

So, part of where I wanted to start BG is that I have been we exist in sort of two different worlds. You've been in the brand side exclusively, and you've worked in, I would say, even larger corporations than I ever have. I've been earlier in the startup phase, and I think we sort of have this intrigue to each other because of that, we sort of look over the fence at each other's worlds and wonder, oh, what's going on over there?

It's exciting and energizing but you've navigated that world. To now getting to be the CEO of an incredible consumer brand that people all over the world know and are excited about. And I've watched you go from me in a, you know, whatever restaurant we were in A TGI Fridays or something, dreaming about a startup idea to where you're at now.

And that career progression has been really cool to watch. And watching you navigate the companies that you've been in has been a thing that. I've been fascinated by, and we got a lot of marketers that listen to this and I don't know that it's very normal to see marketers cross over to the CEO role into consumer world.

And so maybe you could give people a little sort of quick journey through your career story and how you've ended up where you're at today.

[00:03:06] Brian Garofalow: Sure. It, it is funny. Before I started, I just love that you bring up the, the. Over the fence at each other because I, I've always felt like that, that you and I are, are so close, but so far and always wondering, you know,

what you're doing, how you're doing it, and then I think of my little, you know, remedial world over here as why would you be interested in this?

But I, I think very good symbiotic relationship. All right, so career path you know, I, I think I've been you know, product of, of probably two. Two things that are really common. One, just the standard blue collar work ethic and, and the drive to go reach potential. You know, something I think that I see in people, you kind of either have it or you don't.

It's usually if it's built, it's built from a pretty young age. I think I get that from my dad. So always, always just think I can do a little more than what I'm doing now. And it's always pushed me career-wise to go try and reach the next level. And you know, I think when I was 20 years ago in college, I. End game for me was CEO and I thought that I'd be able to be good at that, and there's a long, long path to get here, but, you know, the stars aligned here. I'm you know, that's kind of number one. Number two timing. You know, you, you always read all the, the Harvard business reviews around companies like Microsoft and Bill Gates says, well, there would've been 50 different Microsofts.

I was just the one that was there at the right place at the right time. So, I grew up Southern California, kind of the free time was all about skateboarding and soccer and was never very good at either one of them. But loved them both incredibly passionately. Skateboarding more so, really shaped my my friend group, my taste in music and art and you know, all the social activities outside of just the, the art and the sport of skateboarding itself.

And so. I got into the brands and Southern California just so happened to be the epicenter of the board sports industry. And I was there at the right place at the right time, that the trajectory was incredibly steep with the amount of consumers, brands business that was happening. So I got to be here to experience that.

Right when I got outta college, I started working my very first job the very first corporate job was a company called Soul Technology. That makes etnies and s in America footwear, 32 snowboard boots. And I started working on the marketing side for the snowboard boot brand. And you know, just always one of those people going back to number one of like the drive. I was always there like in early there, late, you know, I'm here to carry the box to the trade show. I'm to do my work. You know, have a late night conversation with somebody, seven rungs above the ladder with me just to spitball ideas and learn. And that kind of helped me with a progression through the board sports industry.

And I spent about you know, a good 15, 20 years in various roles in board sports and ended up getting a run marketing for great companies like RUCA, RVCA Apparel where I was when we met. DC shoes, element skateboards just super cool stuff that bring a lot of nostalgia to a lot of people kind of, of our age.

[00:06:14] Taylor Holiday: Well, and, and in the heyday of all those brands too, a lot of 'em,

as the center of culture.

[00:06:18] Brian Garofalow: Yeah.

E exactly. So awesome with with culture and coolness and you know. Being able to invest in doing fun stuff, like really great experience. So kind of the bad side of that is you know, I saw a lot of waste just as far as you know, the operations side of those businesses.

Things like. We had to guess what the consumer was gonna want 18 months from now. We had to be the bank to provide terms to all these wholesale accounts. We had to be a significant logistics operation, shipping product all around the world. So I thought, I'm super smart. I can go fix these big problems that are a whole lot bigger than myself. And started a, did a tech startup with a friend, and then a third co-founder raised some money up in Silicon Valley and built a business called Yoshi. And Yoshi in my mind, was gonna solve all of these significant ideas via make on demand business and apparel and accessories. What it ended up being was more of like rapid prototyping and and novelty gifting, but it worked really well, learned a ton, and that was kind of my first real dip into e-commerce business. So owning an app based business where you have kind of these two major gates. One, download the app to convert somebody into a sale. Did well with the business. C certainly on the education side. Ended up selling the business and then was consulting for a while. Got back into brand building 'cause that's what I love at the core.

I'm, I'm a brand marketer. And was working with a company called Board Riders, which owns owned half of the surf industry all around the world. And then a good friend of mine called me up about IG group coolers and said, Hey we're doing a turnaround effort. It's PE owned. We need somebody to come in and run the brand and run direct to consumer business.

And I want you to do that. And my first reaction was absolutely not. Why on earth would I go work for a cooler company? This seems this seems funny to me. But when we're talking about career path, you know, I started really seeing like, hey, this is a much larger customer base than I've worked with before.

It's a much broader consumer base and customer base than I've worked with before. Good exposure to some of the biggest retailers and biggest companies in the world, like Target and Walmart, exporting goods, et cetera, et cetera. So, ended up coming around and did five years with IG as the chief marketing officer There. So I owned our direct to consumer business. You know, you and I had a, one of our significant wins together building, building a business that started less than zero and today is a pretty significant part of their distribution and PE owned. So ended up having a great exit with Igloo. We sold it to a company called Dometic. Now Dometic is. A large global, publicly traded B2B supplier for marine and RV industries, and they wanted to get a little more consumer facing. That was their thesis in, in purchasing Igloo. For me personally, I ended up as the chief marketing officer for the Dometic group three and a half billion dollars in revenue.

12,000 people. Global enterprise, publicly traded, headquartered in Stockholm. So incredible opportunity for me to have a much larger global exposure to business. But the commute from Southern California to Stockholm, a little tough but amazing experience. Love the people there. And then it kind of brings us to where we're today.

So. I've always been very intentional about relationships, do unto others as you would wish them to do unto you. And that has served me very, very well. People know that I'll pick up the phone, people know that I'll do what I say I will do. People know hopefully that I will not burn them if I if I'm going to deliver something. The chairman of the board from ig. Had gone on to become the chairman of the board of Skullcandy and called me up and said, Hey, we are private equity owned, doing a turnaround. This is much closer to the consumer that you know and love. And we're looking to make a change here. So come on board. It was a little earlier than I was expecting but as a goal in the career and having a great network of people around me, specifically this Steven Shier, who's chair of our board at Skullcandy. Brought me over and owned by Mill Road Capital. I think they had some some confidence in me of having experience with the consumer, the distribution channels and prior PE experience as well. So, very long-winded answer, but scrappy little skate kid from Southern California to here we are now.

Look at us. Who would've thought.

[00:10:53] Taylor Holiday: Yeah, I, so there's a, there's a couple themes there that I'm glad you hit on because they're the ones that I would notice. One, you talked about relationship, and this is a thing that you're world class at, is that you know how to maintain. Relationship, you know how to invest in people and make them feel cared for.

I use this story all the time, even it shows up in your vendor relationships. In 12 years of running CTC, I've had two customers ever show up at my office to celebrate work that we've done on their behalf, and you were one of them. And what that does for people and their experience of you is they just feel appreciated.

They feel cared for, they want to win for you. They want to be connected in a way that. Just shows up in so many ways that may not benefit you in the moment, but 10 years from now, you're gonna need that thing and that pers and you just have a giant web of that, of people and it, it showed up. When you showed up at Skullcandy, you brought everybody with you.

You had a great network of people to come and help you do the job. And so where did, like, is that an inherent skill? Is that something your dad taught you? Like where did that idea that that would matter come from?

[00:11:51] Brian Garofalow: Man, that's a great question. But well, first off, thank you. I, I appreciate hearing that the, the inherent skill, i, I think that's, you know, one of those things that's probably ingrained in you from friends and family at a very early age. So a lot of people that looked out for me when I was young.

The, the neighbors, the older brothers, of course, the parents the teammates the teachers, all, all those types of things that, you know, just kind of impressed upon me of like, again, the, the very simple do unto others. Having a lot of people that looked out for me that really made me appreciate those things. And then I also think well here's, here's a, a very important career lesson that I had as I was kind of like getting the next promotion, the next promotion, the next promotion. You know this. Not a lot of people that don't know me that are listening would know this. I'm a very sarcastic person. I have a very dry sense of humor, and especially with friends and definitely close friends, I joke a lot. So I brought that personality into the workplace and you know, this happened two times. Very specifically. One time hit me really hard was. I made a joke that was very dry and sarcastic to somebody who was, you know, an individual contributor just starting their career. And I was a director, VP level at some point, and I got a call from their boss saying, what the heck did you say to this person?

They're in my office crying, thinking that you were really mad at them. I was like, oh my gosh, I completely forgot that like the. The goofy 13-year-old kid is now the 30 5-year-old vp. And my my words have a lot more weight with certain people than I think, 'cause I think I'm joking and, and they don't.

So you know, that was, that was one that hit me hard of like, okay, understand the position and when people, when people need and want to believe in you and have faith in you. That also means that when you are angry, they're adversely affected. When you are appreciative, they're encouraged even more. And also just logic, right? Like, Hey, I might, I might say, here's a strategy. Go put it in place. I don't push the buttons. I have no idea what's happening on the ground floor of customer acquisition today because I'm so far removed from it. But I know that every single one of those people has an outsized impact to success or failure.

So let 'em know you're doing amazing. Thank you and congratulations, or We need to improve here. Let's let's fix this.

[00:14:37] Taylor Holiday: Yeah, and I've watched that skill sort of enable you to solve business problems in a unique way too. Like I think a great example is in Igloo, like this was a very legacy retail distribution where you were suddenly responsible for this direct business that in some ways it's like threatening to an existing infrastructure of people and opportunity, and so it would be very easily to.

For that to become an adversarial type position inside of an organization like that. But one of the things that you did early on that I I'll reference a lot too, was that you started to hold these like education internal sessions where you would invite people in Katy, Texas where Igloo is headquartered to a dialogue with you about what we're trying to accomplish, how this serves the brand, why it's gonna be good for everything to build sort of consensus.

And this is the thing, watching you inside of a bigger corporate entity that I think is a, is a real master skill, is like. Understand that people are inherently going to be the ones that are gonna be advocating you for you behind closed doors. They're gonna have an opinion on your work. And the more positive advocates you build inside of an organization, the better your chance of being seen as successful is.

And so I think that it doesn't just show up in like friendship. It shows up in very practical business success. And I think that's a unique example.

[00:15:50] Brian Garofalow: Totally agree. And you know, the, the more and more I work with people and, you know, scaling the amount of people that I work with you know, the, the very, very basic lessons that I. Really mattered to me when I was reporting up into somebody, or even more so reflected on me now that I'm trying to drive an entire culture, is clarity, transparency, honesty.

Like, Hey, we have a strategy. This is it. We're showing up to work to execute this every day. And you have a question, ask me, and I'm here to try and give you the, the, the best amount of transparency and clarity that I. Here's the job to do and let's go do it. And then consistency, you know, we've got a, you know, we've got a long-term strategy at Skullcandy we have an annual plan with key strategic initiatives. And then down to the individual contributor level, it's like, Hey, here's how this ladders up into the overall long-term, multi-year strategy. Like ideally the team. Knows what they're here to do, and they see the constancy and consistency and transparency in me of, I'm not gonna go chase the butterflies of, oh, I like this.

Now let's go, let's go pivot our entire strategy and leave the, the, the, the staff and chaos unless something significantly out of our control happens that we need to be proactive or reactive to all uh, COVID.

[00:17:22] Taylor Holiday: So the other thing you said in your story that I want to go to is you've self-identified as a brand marketer, which I. I bet even before you would call yourself a CEO, you'd probably call yourself a brand marketer at like as at the identity level in terms of who you are. At least that's my experience.

And this is another fun thing where we're like opposites we're yin and yang in a way that we serve each other and that like. I'm the tactician that's executing, and I love to partner with people like you because it's always the part I don't control. I don't control the ethos or the spirit of the thing or the product.

And so I'm responsible for distributing it. And if it's kind of shallow and sucks my job's really, really hard and vice versa, I think I get to be sort of be the the, the wizard that supports your vision and distributes it broadly, et cetera, et cetera. But. I'm curious one, what does that phrase mean to you?

Brand marketer. What makes a good brand? And then let's use this to jump into Skullcandy. Why did you believe that Skullcandy was a special brand?

[00:18:12] Brian Garofalow: Great. You're gonna have to help me remember all those three things by the time I get to the end of this. So, so brand marketing, what does that mean? You know, we have the idea of a brand that is completely surrounding and enveloping and inside and outside of Skullcandy the products. So anybody can go make a widget and they can put features and benefits in it and match a price point at a price band that consumers show that they want and go transact and sell that. But transact is very transactional and it's usually gonna be a one-time purchase, and that consumer is gonna go get the next one in their replacement cycle with a better price or more features. And brand agnostic, they don't care when you have a brand wrapped into that product. Then in comes the idea of community. So who is the cohort of consumers that care about building a community? Doing things a certain way, standing for something, supporting some things, building other things that can all be wrapped up in a, in a logo and an identity. So when I think of brand marketing, it's usually it's bigger than even the company.

So it involves. The consumers for us as a big wholesale business, it involves the customer on the wholesale level, it involves the media. It certainly involves everybody who has a hand in the use of the product for us, the content creators you know, who are, who are the people that are building the content that people are listening to through, through our headphones, all those types of things. When you get it right, and specifically in lifestyle brands you're usually dealing with a very aspirational consumer. So if you get that right there, then the consumers who are inspired by those aspirational consumers usually gravitate towards those brands. So the magic that ends up happening down to a tactical level of somebody like you is. You execute brand correctly, your customer acquisition costs goes down, your lifetime value goes up. Then, you know, when you're when you're in a business case like ours creates enterprise value.

[00:20:21] Taylor Holiday: I love, I love how pragmatic you are about that. No, like, and this is the thing, so one, I think growing up in the skate culture, like the, if you didn't experience. That, that this, even this phrase you used, lifestyle lifestyle brands was such a thing that I grew up around this idea of it and it, it's connected very much to I think, identity, right?

This idea that this logo says something about me more than it does about the features and benefits of the product, like that is all source secondary to the identity statement associated with the logo and the image, right? And skate culture in orange in all these brands, surf culture were very much that.

There was some identity statement that was associated with it. And it's funny, I don't think I became aware of it until I went to college, and so I grew up in Orange County. A lot of these brands were obviously a part of our life in the era that we grew up in. And when I moved to Arizona, all of a sudden, it was the first time I realized that the idea of being from Orange County had an identity label to other people.

In a way that was the first light bulb for me of like, oh. There's a culture here that people have an impression of that's associated with me, and it was tied up and all that stuff. You know, the Billabongs, the Quicksilvers, the Rustys, the uls, all of it. It was all tied up in a similar way to people's mind, but I didn't realize it until I saw people experience me through that lens.

[00:21:31] Brian Garofalow: Absolutely. And it's I love when you have this you know, a big culture. Like say it's the board sports culture. When you are wearing a Quicksilver t-shirt and you're a kid from Orange County and you're going to Arizona immediately, that's going to have people perceive you as a certain way. When you're in Orange County and you see somebody wearing the exact same color t-shirt with a very similar logo on it, but it might be Volcom or Hurley or you know, Brixton or Captain Finn, or now possum. Like all of these different brands say something very specific about the consumer. So one, it's like, you know, are you, do you know what surfing is? But then two, like are you this type of surfer or that type of surfer from this area or that area? And are like, if some people know about a certain brand are usually tip of the spear and you can usually trust that like they're probably a really good surfer.

Or you know, for, for me. I got into sneakers at a young age, just being into soccer. It was one of those things, the feet, the shoes, all this. And we had our own brands and it was like when I saw somebody wearing a certain logo at a young age, it was like, oh man, they're a soccer player. And it's really, really evident to me.

And nobody else knows this. Like we're gonna certain club. And then skateboarding has a similar thing going on with shoes, but what I even like about it more is like. When I look at somebody and see a pair of shoes they're wearing, it's like, oh, they're a skateboarder. But then if they've got a certain wear pattern on their shoes, it's like, oh, wow, they're really good.

[00:23:07] Taylor Holiday: Yeah. And you can tell that immediately. Yeah. It's so interesting. So, so tell me about then. And there's an interesting thing that I think you have, and Igloo and Skull Kennedy are both, I think in different ways, clear examples of this one. The other secret about you is you people don't know is that you love America and your real ambition is actually to be the mayor of Irvine California.

People don't know that, which I'm sure is an inevitability for you, but you have this sort of deep appreciation for it. I think the, like the depth and the grandiose nature of a story, right? And so one of the things I think you love about igloo 1947 Americana, they're in every garage in America. Like there's substance there that you can point to and appreciate in a way that also I think is connected to authenticity and what's real.

And you have a real good sense of that. So that was it for Igloo, and maybe you can touch on that, but what, what is it with Skullcandy? Why did that appeal to you in a way that you thought you could tap into identity associated with? Brand.

[00:24:02] Brian Garofalow: Okay. Great. Great questions. I think igloo like when I, when I really started taking it seriously, like it's such a no-brainer and I'll, I'll get into that Skullcandy is, I think it's a no-brainer for someone like me. The example of you're wearing a Quicksilver t-shirt, I know you're a surfer, or you wear a very specific, have a very specific wear pattern on your skate shoes.

I know that you know how to do this specific trick. So the first one I grew when I look at the, the broadest scope of consumer goods in the US and lifestyle businesses and telling stories. You gotta hit on certain things. Authenticity is a big one. Is there some meat on the bone of of story that you can tell with Igloo specifically? There was a bit of a turnaround effort there, and here's like one of the things where I think I've identified a couple opportunities for me personally that worked really well with the concept of a turnaround effort. But with a brand, is it really a turnaround effort or does it just need to be resuscitated? So Igloo is the perfect example of checks. Every single box igloo is 75-year-old American Legacy brand. They invented a category they manufacture in the us the, the brand Awa unaided brand awareness is phenomenally high in the us and then Affinity was also still pretty high, but they're not a marketing business when, when I showed up and essentially like the last 25 years of igloos existence, they're an an American manufacturer and marketing is not a core skillset. Always farmed out to agency partners and, you know, changed from time to time and when there was some extra contribution margin from a sales win, like, oh, let's do an ad campaign, but not a, a lifestyle marketing business.

So I look at that and say, okay, let's. Let's take our step back here and look at the whole market and you know, if you're in America in the last 10 years and you think coolers, what's the brand that comes to mind?

[00:26:09] Taylor Holiday: In the last 10 years,

[00:26:10] Brian Garofalow: Yeah,

[00:26:11] Taylor Holiday: am I allowed to say it? I used to not be allowed to say it.

[00:26:14] Brian Garofalow: you're, you're allowed to say it.

[00:26:15] Taylor Holiday: It's Yeti.

[00:26:17] Brian Garofalow: Right. So Yeti is a phenomenal brand marketer. They're not a phenomenal manufacturer. So they came in and just absolutely ate a group's lunch as far as brand is concerned, and built this lifestyle and had the idea of the premium outdoor consumer that says, Hey, instead of buying a $50 cooler, you need this $500 cooler because you love the outdoors and camping and hiking and hunting and fishing. And all of these things that you know, people are spending exorbitant amounts of money on experience with, but they put this gap in the market literally from a $50 a SP up to 500. So there's all this white space in the market, and then they put this giant gap in the market from manufacturer to brand. So now I look at this and say, we have this competitive advantage with manufacturing. We have a competitive advantage of manufacturing in the us. We have a competitive advantage with awareness. All we need to do is turn the lights back on. So how can we go tell our story, which is unique? How can we be scrappy and get, you know, the, the dollar value out of 10 cents that we spend? And it brings a lot of the board sports mentality into it. So instead of going to be, you know, the Nike of coolers we're going to win, which was Yeti. Big came in with our authentic story and just said, oh, we're gonna go have the most fun. Like you guys go climb Mount Everest with a 700 pound cooler. We're going to climb into our backyard and have a barbecue with our friends. So we told lots and lots of fun stories that were all about just, it was Fada, FADA fun, American, durable and accessible. And we beat that drum and we did lots of storytelling. People put smiles on their faces with it. And you know what this is really interesting and fun. And then, you know, tactically and logistically, we put the right merchandise offering together for direct to consumer. So the right price points and margins and storytelling and impulse, nature of, of purchase and built a really large direct to consumer business on it. Part of this touch. Yes.

Significant part of that business is wholesale. So how do we go build a direct to consumer business that doesn't ruffle the feathers? So I've always been able to prove out and love to share this with two things. One direct to consumer business is a testing ground and ends up becoming a reading indicator of what works and what doesn't. We can take data, bring it to a wholesale partner and say, Hey, we made all these investments. We had nine failures and we had one runaway success. We can go replicate this in your stores. And we did that going from, you know, very small stories with some, with some direct to consumer wins to replicate the same concept in Walmart at a hundred x the scale. And then the second thing always ends up being tip of the spear brand building. Rising tide floats all boats. A when we can, when we can be successful with a consumer who wants to come directly to the brand, we know that we can go replicate this, scale this, and instead of having a pie of a hundred units and cutting 30 of them off for direct to consumer, we're gonna turn the pie into a thousand units.

[00:29:42] Taylor Holiday: So what I think is so interesting in both these cases, and we'll use this to, to dive into the specifics, I think with is. When you come to me and usually both of us as we're considering current opportunities, we're having conversations in both cases. My point of view of the direct to consumer BA business was like, these are poor genetic attributes of products that work well on the internet, right?

Like shipping coolers at low A OV and high value to weight ratio and minimal LTV. Creates complexity. Headphones aren't too different. It's consumer electronics is challenging. There's warranty, there's not that, the margins aren't insane. There's not a lot of LTV like in the sort of underlying, and a lot of this, this show is about sort of dissecting the genetic attributes, but you've always known something a little bit bigger than that, which is what you just described, I think, with Igloo, which is that, yeah, look, what we need direct to consumer to do is not.

To be the engine for the financial growth of the business forever. It has this other role to play that can still be margin, accretive, and all good financial objectives, but it's part of a bigger story when you're building a brand, when you're building a business into an omnichannel distribution. So why were you confident in Skullcandy?

Why did you think it could work from where it was at to where you thought it could go?

[00:30:56] Brian Garofalow: Yep. So again, going back to that story of like, hey, here's somebody wearing a Quicksilver shirt. They're into surfing. Here's somebody with a very specific wear pattern on their shoes. And, you know, I'm one of the per one of the people that know like, Hey, just intrinsically, because I've done this for so long and I am that consumer. I know that this is going to work for this cohort of consumers. The data says there's this many of them around this. Many people are inspired by those people. So here's a total addressable market. Will this work or not? And then the magic is, can we turn the lights back on with the brand? So, so many things that were similar with with igloo and the cooler space are similar with skull, candy and the consumer electronic space.

So. You had Yeti that came out of nowhere and created a much larger market and much higher a OV and a brand in consumer electronics. That's Apple. So AirPods didn't exist in the very recent past, which is crazy to think, but they came in and just absolutely reset the market. So I know that there is a ton of white space between us and Apple. I know there are a very specific group of consumers that wants to be part of a community and a brand like we can go build. And I know that we have a brand with high awareness and high affinity, but it just hasn't been but as aggressive with brand marketing in the last about seven years. But when I go talk to consumers and I tell them about Skullcandy. The, or that I'm work at school Candy, the, the response is always, oh, I remember them. Not one person of the hundreds that I've literally talked to have said, oh, I don't like them. It's, oh, I remember them. High awareness, high affinity. We go back to the consumer, turn the lights on in a 2024 type of way. Introduce the brand in a modern way to new consumers that are a little bit younger, we will go win. Most confidence in that, we

just have to 

[00:32:59] Taylor Holiday: the, um.

[00:33:00] Brian Garofalow: best job of being

Skullcandy.

that we can the FO for Skullcandy is fun. So it's very similar model FFUN. So F is is literally just fun. We're here to go amplify the fun for a specific set of consumers, and it is, it is intrinsic with those set of consumers of how or what fund means to them and how we deliver that. Most people, they see a skateboarder sliding down a handrail or a snowboarder going upside down on purpose, or a surfer in a 10 foot barrel at pipeline. And that is, oh my gosh, that's insane. Why on earth would they ever wanna do that to our group of consumers? At the very core level? That looks like fun. I want to go do that. The U is for underdogs. So we're a challenger brand. We support. Absolutely support marginalized communities whether that be something as which seems as un marginalized as a skateboarder or as marginalized as L-G-B-T-Q. So we're here for the underdogs as a challenger brand, and then the N is for next. One of the things that makes us special is, we are the skateboarders, the surfers, the snowboarders. We're at ground zero of culture and cultural epicenters and moments. We know what's coming next. So we get the advantage of our friend who's 16 is going to be the next big designer.

They're on the trajectory. We know that the next big musician, the next big athlete we work with them because we're friends. We don't have to go pay them. $2 million and have a team of 50 people go build one product with them because we only know them after they won their Grammy. Things like that.

So that's, that's kind of our, our ethos there of, of fun. That's our, our version of fada and we're, we're already starting

to 

[00:34:56] Taylor Holiday: there something about, like, the idea, so obviously both of them contain this idea of fun, but the, the idea of the experience of the brand being positive, hopeful, energetic, that you think is a good place for consumer product to live. Like, is that intentional for you or is that just, you think it's your personality?

What do you think it, why do you think that you've been drawn to that idea?

[00:35:17] Brian Garofalow: Yeah, I think personality wise, I'm drawn to that and drawn to that potential. You know, consumer goods in general, like they should be additive to a consumer's experience, right? If if I wanna listen to music I want the product to connect to my source device very easily. I want the audio quality to sound good.

I want the mic to work well. But you know, it would take it a little bit over the top if it made me feel good. And that is so incredibly difficult to do, but when you have the right team, the right staff, the authentic people that know how to create that sense of energy and excitement with the right consumer that's, that's special.

[00:36:00] Taylor Holiday: What do you think do you think the role of board sports is? The same in culture. How do you think it's changed and what do you think its impact is relative to the early years of our lives and even more broadly in America nowadays or globally for you guys as a global brand?

[00:36:19] Brian Garofalow: Super, super great question. So way, way different today than it was 20 years ago. So 20 years ago on the upper trajectory as far as. Investment, investment with consumers times like way more people were entering those sports and cultures and giving 'em a try way more brands and money and retailers, et cetera. A lot of that retailer activity shifted to direct to consumer. It's been really tough on the specialty industry. Which that has a significant impact in kind of the timeline and where, where board sports is and cultural zeitgeist. 'cause all those specialty retailers are community centers. So people go hang out at the skate shop and watch the newest movie people hang out at the surf shop and talk about the next swell coming in. All those types of things. And there's a lot less of them today because of direct to consumer businesses, with brands because of Amazon, because of all the, the big retail dot coms, et cetera. Now you still have very high participation. There's definitely a big covid bump. A lot of those board sports are in the Olympics.

So as far as cultural zeitgeist, like participation, still very much there. But the excitement I would say is objectively lower. So when, when you and I were in our height of, you know, teens, early 20 years. We had wild personalities that were like, you know, the craziest actors and musicians all rolled up into a skateboarder, a surfer, a snowboarder.

And now as so much more money has come into it, we're kind of dominated by the energy drinks. With sponsorship. It's very homogenized. Like most all of the athletes, which are inspirational, motivational, they seem very similar in. Aesthetics and performance and all, all those types of things where you know, I, I don't see as much, you know, adrenaline shot, excitement of all these wild characters that that used to be out there. So I've also been through three cycles of this industry and know that it's cyclical in nature. So I very much feel like we're, we're about to go on the upswing with just fun and excitement again. But I will say this, surfing always is and always will be phenomenally aspirational and sexy. It is people in exotic locations with amazing waves and sunshines and tans, et cetera. Snowboarding will always be aspirational of the wintertime version of surfing. Skateboarding will always be aspirational, inspirational because it is street culture and fashion and music, et cetera, et cetera. Skateboarding globally seems like the leader and always will be. To me. Surfing snowboarding always seem a little more like, I don't know, premium, aspirational in, in nature.

Now, all of this you know, put it in a little box because the 2024 version of Skullcandy is not just board sports. That is one third of our core consumer in the 2024 version of who we are, like as. You've gone from when we were kids to today. That board sports world has absolutely evolved. And now we have two other very large consumer groups.

One, we just identify as the content creators. So this is you, it's the, it's the podcaster, the social media celeb, even the musician, the YouTube vlogger, the comedian, et cetera, et cetera. And then you have the third group, which is gaming. So. Those other two groups are very similar to board sports, and you have the core lifestyle group. Like when I ask you, tell me about yourself, you might say, I'm a YouTuber. You might say, I am I'm a gamer. You might say I'm a skateboarder. And each one of those groups has people that are very inspired by those core consumers who live a lifestyle around those activities.

[00:40:27] Taylor Holiday: It's really interesting to see. I think the way that. Yeah. Social media and content has created, I think these like sub genres that do influence culture just because of the amount of distribution they're able to get. Like it's, it's, it feels hard in our day, like so much of that content. I think about MTV as a sort of primary cultural engine in so many ways.

And what, and like skate videos, I feel like were a big, like there were these mechanisms of distribution that were much smaller that almost felt like there was some discovery to them. But now it's like you look at these. The Twitch streamers, these other people, their reach is just so huge globally that their influence is so outsized relative to feels like what could be created out of surf culture or these edited things.

It's just disproportionately more eyeballs in this way. That's been sort of, I think, a fascinating change to go after. And, and the good thing is, is that your product fits really well into serving that demographic of people. It's a technical responsibility that they need to have solved for, but what do you like, how much of that do you think is like, 

[00:41:27] Brian Garofalow: well, sorry, I can't, I can't help but interrupt here, but this is, this is the it's the evolution of media, right? So 20, 20 years ago if you're thinking skateboarding. We had six different magazines just in the US. We had tons of brand videos. We had two networks on television broadcast networks that one was dedicated to the culture and one had a significant amount of their content dedicated to the culture. As media has evolved, it's gone from traditional media to social media, and now. There are a handful of, again, just going into skateboarding, there's a handful of skateboarders that have the, the reach that is so significant with their audiences. They are bigger today than the entire media industry from 20 years ago with one person on their you know, Instagram, TikTok, YouTube and, and X channels.

[00:42:25] Taylor Holiday: That's wild. Who is that? Is that Nija? Who is it?

[00:42:27] Brian Garofalow: There's plenty of 'em. There's Nigel, there's Andrew Reynolds, there's PO, there's lots of people that are above and beyond the, the million fan mark of, of course, Tony Hawk. The, the biggest legend of the sport. And then you have people that you've never heard of that are you know, they would fall more into the content creator bucket for us than this, the board sports bucket.

But. They likely are very talented, skateboarder, surfer, snowboarder, but they just decided the the industry isn't right for me. I'm gonna go be my own industry. So a great example would be, you know, blurs a line between the surfer and the content creator, but a Jamie O'Brien you know, pipe master, one of the greatest surfers of all time, and just decided, you know what, I'm gonna go be a content creator first instead of a competitive surfer.

And now he's got. More reach you know, he's a, a multimillion person, fan base. More reach than all of the surf magazines combined when they existed.

[00:43:27] Taylor Holiday: Yeah, that's, that's nuts. How about so one of the things that I've always thought is a little different in for Skullcandy. Versus let's say apparel, where functionally there's really no difference between the cotton T-shirts that everybody's printing their logo on when you're dealing with a lifestyle apparel business.

Now the, for somebody like Ruca, maybe there was, you know, there's an evolution of that in some ways. But when you're talking about consumer electronics, there is a lot of technical specifications that do matter somewhat, right? If you're gonna use those headphones, the microphone has to be good enough to like, so how does that play into an.

And what is, is it just like getting it to good enough? Is it about being technically excellent? How do you think about the technical part of what is a newer category for you to experience in that way?

[00:44:10] Brian Garofalow: Yeah, there's the uh, the, the blessing and the curse there, right? The, the blessing is we have a much higher barrier to entry as far as building a product. So the competition is not as. It's not as easy for anybody off the street to go build a headphone company as it is to put a logo on a T-shirt. So the, the board sports apparel industry has absolutely suffered from death by a thousand paper cuts. Every single one of those social media celebs has their own merch business. And every single time somebody buys a Kai Samat t-shirt, that's probably a Volcom t-shirt that they're not buying or something like that. When it comes to headphones, so we have you know, we have a, a product team of 30 people that are all phenomenally intelligent engineers you know, hardware engineers, mechanical engineers, firmware engineers industrial designers, all those things that it takes to build a really quality product. The, the curse here is, you know, we have competitors that are significantly larger than us. And have you know, our, our group of engineers, you know, the, the competitive set group of engineers might be larger by a factor of 10. So it's, it's pretty intense to be able to build a phenomenally quality product versus, you know, the tip of the spear inventors of spatial audio. Skullcandy did not invent spatial audio. But we know how it works and we know how to build it into our products, whether it be with our own technology today, or a license with with somebody who built a, a feature set like that.

[00:45:47] Taylor Holiday: So you, you sort of mentioned it, right? You, there's the grill in the room. You're competing with the largest brand in the world, like the largest consumer brand with the most resources that's ever existed in human history. Like that's who you decided to go after. In terms of the potential challengers, like, so when you think about that, like the product you're wearing right now.

Is it you want people to swap them out, you want them to own both. Do you think about people who don't have any of them yet? Like how do you think about the actual market? Is it just like growing the tam and you're gonna take your piece? Are you trying to win market share? Like how do you actually think about the category as it relates to the competition?

And obviously there's more than just Apple, but they're obviously the behemoth in the room.

[00:46:23] Brian Garofalow: Of course. So there, you know, I, I just wanna use a scalpel instead of a shotgun. Right? So of the 8 billion consumers on planet Earth here how many of them are in the total addressable market for headphones? How many of them would likely be a, a purchaser of brand one that likely has an ecosystem, an operating system, and multiple hardware products that all connect together seamlessly. And then who are the people that should be Skullcandy consumers? So our consumer profiles, the lifestyle that we wanna build and support and win win the fan base of. And when we look at data, you know, there's similar, similar thing that we did at Iru, like. How many coolers does somebody own? How many do they need?

How many do they want? What's a use case? Do I need to own 110 quart gigantic cooler to go take my lunch to work? Of course not. So, hey, there's a, there's a, a real great example for one person that owned two different styles of, of of coolers. So here you know, there's, there's some fairly clear use cases. Everyday carry. So what I'm wearing right now you know, looks good, sounds good, connects well. Microphone works. This is called our Dime three product, and you can purchase these for $30. The battery life is phenomenal. You're not going to have to charge these every single day. So when this is you know, comes in a cool case with unique industrial design that can hook right onto your key chain those types of things, like, oh, this is just. Everyday use and it's, you know, I don't need to go spend $250 for this. Then you've got something like you're wearing over the ear noise canceling. If I'm gonna go work out, if I wanna focus, if I want to be in my zone, or if I wanna travel and tune out the world around me, that's a great use case for that. If I want to go run or do something where you know, my body is physically moving a ton. We've got great products. Like, let's see, I've got something in front of me here. You know, an active product with an ear hook, so it's going to keep your product in place and a whole lot more stable wired buds for, I don't wanna have to worry about charging all of those types of things.

So we're gonna, we're gonna develop product at the right price point with the right feature set for the right use case. And we know. We have great fans with high LTV that wanna buy every single one of those products for all those use cases. We also know that there would be fans or just consumers of other brands that may need or want multiple different types of products.

And if we can be one of those, of their four or five that they own, it's a big one for us.

[00:49:12] Taylor Holiday: Yeah, makes so sense. I the as you're talking, I'm like envisioning ad creative. I saw this, this image, like this is a thing I've seen people do and I, I know I have this where it's like you have AirPods 1, 2, 3, 4, 5, 6. 1112, like, 'cause you've lost like 13 of them. And that's like $7,000 that you've wasted because this device that you wanna carry around and use everywhere.

Actually doesn't need to be like, there's a pragmatism to it that like I'm seeing that we all sort of have that experience where we've renamed our Bluetooth devices so many times because we've misplaced them. And what is the appropriate price for something you use every day? Like there's, there's so many different ways to, to put it, but I like the idea that there's, there's a specific somebody for whom this is a better option and our job is to go find them and communicate that reality.

If Skullcandy wins, why will it win? And if they lose, why will it lose?

[00:50:01] Brian Garofalow: Look, there's, there's no if about that. We're, we're absolutely winning. And we, we will continue to do so because. We have a very clear strategy and direction. We have a phenomenally large total addressable market. We have an incredible staff who is insanely engaged authentically in the spaces with the consumers that we want to win with. We have incredibly intelligent people that know how to build the right product very, very quickly and for the right price points. You know, e every single thing we have or every single thing we need to win. We have, it's just a matter of executing. And I have a high, high sense of confidence that this team is a team that executes incredibly well, and we'll continue to do so. So that's number one. Why would we not win something completely outside of our control that we're not prepared for? Hard stop. So you know, a, a lot of people did not see Covid coming. Why would you you know, you can be prepared or not prepared for things like that. And then there's, you know, the resource allocation of how much time, energy, and money should you be spending to be prepared for a what if scenario. But certainly in consumer goods, you know, nobody could get any product into the US and then everybody got too much into the us and then retailer shelves got stock full, and then you saw. Direct to consumer industry was like, fire sale. Get rid of everything for any price we possibly can. So those are, those are incredibly tough situations that are the, the what ifs to be rated to plan for.

But look, my, my confidence level is high because we have the right people, we have the right brand, and there's a lot of consumers out there that are excited for Skullcandy to, to come back.

[00:51:52] Taylor Holiday: The Great Floyd Mayweather once said that the best skill a fighter can have is choosing their fights. And you, sir, have chosen your fights well all throughout your career, so I have no doubt that this is another. One where there's a victory ahead. Where can people follow you? You're pretty, you're a little bit of a lurker on the internet.

Good for a sarcastic comments. Maybe a trophy in your comments if you're lucky. But where, where could people keep in touch if they wanna learn more about you?

[00:52:17] Brian Garofalow: Getting, getting a trophy in your comments. Nothing to do with luck. You earned that, Taylor, you earned it.

[00:52:22] Taylor Holiday: You say that's to all the girls. That's the problem. I 

[00:52:24] Brian Garofalow: look, I'm, I'm I I definitely lurk around. , I, I I'm definitely on on Instagram and LinkedIn. That's where I'm, I'm most active. I'm on, I'm on Twitter x pretty frequently, but that's literally just to learn from, from you and all of your cohorts out there. So I, I would say LinkedIn's the easy one for any any network stuff. Hit

me up. 

[00:52:45] Taylor Holiday: Or hey, swing by our office. We'd love to host you. We got the community, the next gen community center right here. So if you're ever in Costa Mesa, 

[00:52:52] Brian Garofalow: We do. 

[00:52:53] Taylor Holiday: see us both. BG I, I owe you an immense debt of gratitude, man for all of the support and care throughout the years. And I can't wait to see what you do with Skullcandy.

And I mean this, if you're listening, I. You are an aspiring marketer, or you're somebody who wants to run day one, day run a consumer product company. This is the, this is the sleeper giant that you wanna make sure you're following and keeping an eye on. He does it with as much intention, care, integrity, and quality as anyone you'll ever run into.

And Skullcandy's gonna follow in those attributes and you'll be hearing more from that brand real soon. So, appreciate you, sir. Always a pleasure.

[00:53:29] Brian Garofalow: Taylor, you're way too kind. Thank you again for having me on and let's go win together.