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NWA Founders is a voice for Founders, Owners, and Builders driving growth in Northwest Arkansas, and is hosted by Cameron Clark and Nick Beyer.
'NWA Founders' is a voice for Founders, Owners, and Builders driving growth in Northwest Arkansas, hosted by Cameron Clark and Nick Beyer.
To recommend a guest or ask questions, reach out at nwafounders@gmail.com and follow us on YouTube and LinkedIn for video content.
[00:00:00] Cameron Clark: Tom and Allen here. Uh, we're sitting in your brand new headquarters, um, as of November, November, November 25. Mm-hmm. Um, this bookshelf was put up today. Uh, so it's, uh, that's true. But no, it's amazing. This place is beautiful. Um, yeah, I think it's an inspiration if you've got any kind of a warehouse that like, if, if, if, if it looks like this, then it's pretty, pretty awesome.
[00:00:24] Cameron Clark: Um, so just so people kind of understand the business model first, how do you describe yourselves? I mean, I know like three pl maybe thrown around and like, but that's not really your offering either, right? But like, what, what is giving tens
[00:00:41] Allen Befort: now? Yeah. What is now we can walk through the whole story, but now, uh, we're, uh, in the middle kinda the crossroads of e-commerce and content.
[00:00:51] Allen Befort: So what I mean by content, this is brands that are, they're built off of ideas or built off of a message they wanna deliver. Built off of a, uh. Uh, you [00:01:00] know, uh, what's that called? Thought leadership. So you have thought leadership, an idea, a message. You're built off of content. Everything from a TikTok creator.
[00:01:07] Allen Befort: He creates content, everything to a ministry, to an author. These are all content brands. And we're saying, okay, you're a content brand in one way, and how does direct to consumer e-commerce cross with that?
[00:01:17] Cameron Clark: Oh wow.
[00:01:17] Allen Befort: And so we've then built a kind of set of services around that type of audience saying, okay, if you're a direct to consumer content brand, how do we serve you?
[00:01:26] Allen Befort: Uh, and fulfillment. A three pl a warehouse is one piece of that. So the Warehouse is the big one. That's the show you pull up and you're like, wow, look at this. Yeah. But that's only one piece of kind of what we do and kind of who we are at this point. 14 years in,
[00:01:38] Nick Beyer: how much of that business model do you actually have to help the person that you're serving understand that they are right?
[00:01:45] Nick Beyer: Yeah. So do I know that I'm at that intersection? How often do you have to explain that
[00:01:50] Allen Befort: currently? I think that's something we are growing in. I think this, the ones that we initially get the easiest sales pitch is to the one that already knows. Hey, I know this. I'm already [00:02:00] doing this and I need help.
[00:02:00] Allen Befort: Mm-hmm. Great. We're here to help. You're gonna love us. Come on in. It's the ones we're seeing recently that's like, you have an opportunity here, literally is on the phone with a group. Tons of people know it's a big parenting brand nationally. And I'm going, you're doing direct to consumer digital. Why aren't you doing direct to consumer physical?
[00:02:16] Allen Befort: And they're going, wait a minute, but how does that work? And I'm walking 'em through. You could print a book. You could create a product. We could ship it for you. You could do this. And they're going, oh, and I could bundle it with my digital product and I could this and that. But to your point, I had to kind of walk them down that path of like, oh, there's more I could do here.
[00:02:31] Allen Befort: I could take my audience. I could take my content and then turn that into something more. So a little bit of both ends. Mm-hmm. Some people know they need somebody to ship their orders. We love that. Easy, easy phone call, easy sales pitch. Hey, we need to set, we need to ship our orders. Who do I talk to?
[00:02:45] Allen Befort: There's another group that I'm saying, you have an opportunity here. How do we walk you down, help you see what's, what's potential, what you could do.
[00:02:51] Thomas Addington: But they all know this. They all know they want to optimize. The revenue from their content.
[00:02:57] Allen Befort: Yep.
[00:02:57] Thomas Addington: They may not realize exactly how that [00:03:00] can happen. And at ton's, we somehow we, we, we often have to explain the mechanism mm-hmm.
[00:03:06] Thomas Addington: That unlocks that. But they all know as content creators, either individual content creators or content companies, that they need to be able to unlock more revenue
[00:03:21] Cameron Clark: mm-hmm.
[00:03:23] Thomas Addington: Than traditional methods for doing that, allow.
[00:03:27] Cameron Clark: Mm-hmm. Yep.
[00:03:27] Thomas Addington: And what we've done from the very beginning is we have put the content creator in the middle of our business model, our circle of services, and we have grown over time by continually asking the question, what could we do to help them?
[00:03:52] Thomas Addington: Unleash more content. Mm. And at the very beginning when we were having conversations, this is before we even had a clear [00:04:00] understanding of how our business model would mature.
[00:04:02] Allen Befort: Mm.
[00:04:03] Thomas Addington: But we knew this. We knew at the very, even from almost at the very beginning, right after the pivot, uh, after our founding, we had a pivot.
[00:04:11] Thomas Addington: And at that point we knew that that content creator was in the middle. And so we began to go to pub. I went to publishers, and I would say it takes a village to get good content into the hands of a serious reader.
Mm.
[00:04:30] Thomas Addington: And we believe that the content creator deserves the biggest house in the village.
[00:04:36] Cameron Clark: Yeah.
[00:04:36] Thomas Addington: Because the content creator is the only. Part of all of the different, the chain, the elements, whatever you want to call them, required to get that content done, they can't be replaced. You can replace a publisher, a marketing agency, three pl, a manufacturer, a three pl. You can't ever replace the content creator.
[00:04:56] Thomas Addington: And so, um, publishers, at that time, in those [00:05:00] days, publishers were in the middle. They had the biggest house in the village. Yeah. And they, they, they weren't super excited with that.
[00:05:09] Cameron Clark: Yeah. Metaphor. Wait, wait. Yeah. Why, why wouldn't it be nevertheless? And I, I wanna talk, I wanna talk about the beginning, but one more thing before we go, like from, from the inception story.
[00:05:15] Cameron Clark: Yeah. Um, maybe give like a, a story, a call, a client success story or just, just a, like an aha moment of
[00:05:23] Allen Befort: abr,
[00:05:24] Cameron Clark: a creator, a brand, or however you identify 'em as like, hey, like you've got something here and like we can. Help you. Yeah, we can help you with that.
[00:05:32] Allen Befort: Yep. Perfect example. Uh, a couple out of, uh, Oregon, Jeremy and Audrey Roloff.
[00:05:38] Allen Befort: So if you remember the show, uh, uh, little People, big World, remember this show?
[00:05:42] Cameron Clark: Oh
[00:05:42] Allen Befort: yeah. It was, it was a little, it was a show, I think on TLC of, of little people. And, uh, they had one or two sons that were, uh, your, your standard size, however you'd say that. Right. And, uh, he got well known there. He married this, this, this woman who had a great personality.
[00:05:59] Allen Befort: They kind of [00:06:00] built their following. And so as they did that, they had books they would release. Well then it was like, what could we do directly? And so we've been a part of that growth really from a long time. So they came out with a marriage journal. They needed somebody to help them ship that marriage journal.
[00:06:12] Allen Befort: Hey guys, you that sounds great. Let us help you with that. And then as the years went by, we kind of came to them. We're like, what if you did this type of product? Or they'd come to us, Hey, we kind of are thinking of this idea. So we'd help work with them to create that product, get it made. Now they're selling that.
[00:06:25] Allen Befort: Then it's like, Ooh, you could do this, you could do that. And so they've, they've been good at it. So they've been doing their own thing, creating content, doing a podcast, but then to come alongside and have a product engine next to it. They're a perfect example of who we work with. And somebody we've kind of helped, you know, walk along with them just as they've been doing their thing.
[00:06:41] Allen Befort: Rocking and rolling. We've said, Hey, let us add some extra to that. Yeah, leverage your audience, sell directly to them, all that type of stuff.
[00:06:49] Cameron Clark: Well, let's hear from the beginning. So talk about where both of you you're from. Maybe some, some little bit of background, but then I don't wanna talk about the background of the business.
[00:06:55] Cameron Clark: Uh, so Tom, you wanna kick us off here?
[00:06:58] Thomas Addington: The business began [00:07:00] as an idea. All businesses do begin as an idea. And, um, this, this one came from a couple of different strands. I had worked in the content world as a consultant, Steve and I, Steve Graves, and I had done that. But then also I had sat on the board of a number of nonprofits, one of which is actually a collection of nonprofits.
[00:07:24] Thomas Addington: And as I sat there and listened to the challenges of these nonprofits and knew about them personally as well, this thought just kept rolling around in my mind, that became a phrase, which is, what nonprofits need are sustainable sources of non-donor revenue. They need somehow to be able, they need earned income.
[00:07:52] Thomas Addington: They, they need something besides just a donor. And, and, and I knew of some content brands out there, [00:08:00] nonprofit content brands that had that opportunity and weren't able to optimize that. And so that was, that was part of the, the very, very beginning where we thought to ourselves, what if we were able to somehow provide a mechanism that allowed a nonprofit to have a sustainable source of non-donor revenue, earned income, content selling.
[00:08:23] Thomas Addington: And so at the very beginning, there was that,
[00:08:26] Allen Befort: well, that was the, yeah, that was the, the problem. You were, you were wrestling with and you were trying to figure out a solution to, and e-commerce was just gaining some ground. This is 28. 2000. 8,012, right. Like this is how he's wrestling with this question. But e-commerce started to give a.
[00:08:40] Allen Befort: A mechanism to make that happen. Yeah. Okay. Wait. These organizations, these nonprofits, there's now a mechanism to sell or serve their audience with content that is valuable to them. It's not just sell 'em a product. Hey, come buy your pencils from us. It's like, no, we're gonna give you a product that's valuable to you.
[00:08:58] Allen Befort: So the conversation is, man, we can go, [00:09:00] these content brands go to these nonprofits. They could create a sustainable source of non-donor revenue. If they are selling valuable content to their audience, now they have a sustainable source. Now they have money coming in, earned income. So that was the original thought.
[00:09:13] Allen Befort: That was the, you know, as the idea kind of coalesced, kind of came together, it was, wait a minute, we need to use e-commerce to drive sustainable sources of non-government revenue for nonprofits and organizations looking to do some great things in the world.
[00:09:26] Thomas Addington: So that was the original idea, and you always have to start with an idea.
[00:09:30] Thomas Addington: And it turns out it was not a good idea. But you gotta start with an idea, even if it's a bad idea. One of our, one of our phrases is, it takes, it takes, you know. It takes a hundred bad ideas to find a good one. So we got this,
[00:09:41] Allen Befort: this one was a
[00:09:42] Thomas Addington: bad
[00:09:42] Allen Befort: one.
[00:09:42] Thomas Addington: This, we could check this one off the list early. But the idea originally, for the original inception of giving tos is that we, we went to nonprofits and we said, why don't you send your audience, your supporters to our website to purchase product and we will give you [00:10:00] a revenue share back.
[00:10:01] Allen Befort: Yeah. Right.
[00:10:02] Thomas Addington: It didn't work at all. And so
[00:10:04] Allen Befort: this is before Amazon Smile. Amazon smile wasn't a thing. Like this was stuff, I joke that Amazon Smile saw coming. Amazon got scared. They saw us coming and we're worried, but that probably wasn't the case.
[00:10:13] Thomas Addington: So, so that's how it, that's how it begin this. It didn't work well for all kinds of reasons.
[00:10:19] Thomas Addington: Uh, it didn't work as a bad idea. Well,
[00:10:21] Allen Befort: mine
[00:10:22] Thomas Addington: it didn't, it was a bad idea. Yeah. Because there wasn't enough revenue for that nonprofit
[00:10:31] Cameron Clark: Sure.
[00:10:31] Thomas Addington: To make it worth whatever the hassle it was to send their audience. That's right. And it wouldn't have worked anyway because in order for it to really work work, we would've had to have a massive inventory of book product that that's what we were originally selling.
[00:10:48] Thomas Addington: Mm-hmm. We would've had to have a huge inventory of book product, which would never have sustained itself. Right. Yeah. It just would not, it didn't work. Uh, it worked great on paper. It didn't work in reality. Well talk,
[00:10:59] Cameron Clark: talk about like, [00:11:00] okay, scratch that off the list. Go on to the next thing. H how, I mean, it feels like it's a muscle to you.
[00:11:05] Cameron Clark: Like talk about how fast you may have moved, kind of back then to figure out build, you're assembling, it was a team of founders, correct? Mm-hmm. It was,
[00:11:13] Thomas Addington: it was a team of founders.
[00:11:14] Cameron Clark: Um, how that played out. Like, you know, I mean, you were talking at the very beginning like, hey, like. Something you're proud of and
[00:11:21] Allen Befort: wow.
[00:11:21] Allen Befort: Well we were this, at this phase, we didn't know what we were doing. Yeah, this is build something that couldn't survive. But that group of, that, that initial group of founders, you have Gina sgo, Richard Cole, Joel Addington, Tom, and myself, that that initial core group, Tom was funding it. The rest of us, were going, how are we gonna pay the bills?
[00:11:38] Allen Befort: We gotta get it. We gotta find a way to make some business. So this initial idea isn't working, this initial thought saying, Hey, let's have drive nonprofits, drive their audience to our website. That's not working. What else could we do? And basically the conversation came from talking to some authors saying, it's not that I need you to send, I don't need to send my people to you.
[00:11:57] Allen Befort: I need to, I need my people that are already with [00:12:00] me. I need a way to sell to them. I need that to work. And an author started asking us these questions. And we were like, okay, that makes sense. You need to sell to your people. You just need help. Hmm. You just need support. And so that's, that was that initial pivot that started to happen is we started, you know, the, the, the, the group of us, that founding group were looking at each other saying, okay, we can turn around and we can now serve that author.
[00:12:18] Allen Befort: I can tell you those first couple authors, you know, they're coming along saying, well, I need it to report to the New York Times bestseller list. And we were like, what's that? You know, how do you do that? So we bulldogged our way into being a reporting retailer. So one of the big things we offer is if you sell a book with us, it now reports to the New York Times list.
[00:12:35] Allen Befort: Or, Hey, I need somebody to ship all these orders for me. We can do that for you. I mean, if I showed you if they did a site visit, they definitely wouldn't have used us, but yeah, sure. We can ship all those orders out. I can show you our first office with the bags full of books that were going out, even though our office was smaller than their office.
[00:12:49] Allen Befort: You know, it was that type of thing. Uh, and that was the shift. It was a little bit of, what do you need and what can we do? You'll pay us to do that. Yes, sir. We're happy to do it. You're gonna pay us to do that. Absolutely. We can handle that. But that was that [00:13:00] pivot stage. This was 20 13, 20 14. I mean, it was, it was within a first year.
[00:13:03] Allen Befort: We knew this initial idea wasn't working, but we had people saying, I I, I, I kind of hear what you're saying, but I don't need, I don't need to send my audience to you. I need to send my audience to me, but I need help. Can you help us? So that was that, that was that genesis that kind of helped shift us over and go, okay, that's more where we need to go.
[00:13:18] Allen Befort: That's kind of what we need to, to, to chase and start to look into
[00:13:22] Nick Beyer: why books. Why'd you start there?
[00:13:24] Allen Befort: Why books? There's a business reason and a personal reason.
[00:13:30] Allen Befort: Personal reason. We're all,
[00:13:32] Cameron Clark: we're
[00:13:32] Allen Befort: we're book people, we're all, we're book people. This, they're making fun of me. 'cause I made our, our made all of our conference rooms here be named after British authors. So we're currently in the Tolkien room. Okay. Mm-hmm. So soon enough there'll be some Tolkien things in here.
[00:13:44] Allen Befort: CS Lewis rooms over there we have, so we're book nerds. That's just a part of the personal side. Yeah. The other side was, there's some, some opportunity to put books for sale through some of the larger distributors without having to carry inventory. So talk about the business side. Ingram lets you sell books [00:14:00] on your website and ship directly from them to your customer.
[00:14:03] Cameron Clark: Drop shipping.
[00:14:03] Allen Befort: So it was a drop shipping before that was a thing. And so that led to great. That's a first step we can do. Mm-hmm. Now, in the end, once that author said, can you report to the bestseller list, then well now we really need to be on books. We gotta kind of double down on books. And that connected us to publishers who then introduced us to another author.
[00:14:20] Allen Befort: Well now the content brands. Really the content brand thing came along after mm-hmm. We kind of defined ourselves as content brand after we've found ourselves landed there. So we're trying to build a business. We're trying to build a business. Oh, we've kind of landed in this author content oriented brand.
[00:14:35] Allen Befort: World Books now are a center point of that. So,
[00:14:38] Thomas Addington: but then once it became a center point, center point, like it became a thing we actually had to fulfill on that value proposition. Mm-hmm. With content, we began to go really, really deep in what that looks like. So you report to the New York Times, to Nielsen BookScan, and those days you do all of those kinds of [00:15:00] things.
[00:15:00] Thomas Addington: You figure out how to do that and, and then the author says, oh well yeah. My books reported when somebody bought it in Tacoma and somebody else in Anaheim. But I just did an event and there were, uh, 400 books sold that night. Mm-hmm. And they didn't count because both the New York Times and Nielsen kick out volume sales.
[00:15:25] Thomas Addington: Same zip code, same day. Because they, because if it feels like the, the system is being scammed.
[00:15:32] Nick Beyer: Right.
[00:15:32] Thomas Addington: And we had to go to them and explain that is those reporting agencies, actually, that's how books are being sold right now. And your goal is to sell and report a real sale of every mm-hmm. One of these products in a, you know, with fidelity and, um, that's what these are.
[00:15:51] Thomas Addington: Mm-hmm. And so bulk sales, individual sales, at the very beginning, you couldn't do a [00:16:00] sale that would count. If it was somehow associated with the author's own website,
[00:16:06] Cameron Clark: okay.
[00:16:07] Thomas Addington: We became the retailer and we had a mechanism that allowed us as a retailer to report that, even though it was a website, uh, uh, of, of the content provider or the author.
[00:16:20] Thomas Addington: Yeah. So we went deep, deep, deep in this, this, this vertical, I guess you could say. I kept saying to Allen, well, why don't we have other stuff? Why don't we shipping other stuff? And his answer was a great answer, which is, I don't, yeah. But there's still opportunity here, and we still haven't, we still haven't gone as far as we can go with this and going as far as we can go with this.
[00:16:44] Thomas Addington: Has over time meant, I mean, on Monday, uh, Garret's going to New York, he's going to talk to the big publishing houses. If you go to big publishing houses in New York and you go to the top floor, they all know who ton's is. Mm-hmm. Giving ton's is not a consumer facing brand. [00:17:00] Right. So other people, people in Fayetteville, people you know, two blocks away don't know who we are, but agents know who we are.
[00:17:07] Thomas Addington: Agents of high volume content providers. Mm-hmm. Publishers know who we are because we did go deep in those, in that particular vertical book manufacturing. Now creative, uh, creative design related to, to content or whatever is, is uh, something that we offer and so on. So we kind of locked down on that.
[00:17:30] Thomas Addington: Yeah. On that, that vertical.
[00:17:33] Nick Beyer: What would you say? Would you do that again? Because I know there's tons of founders who are listening to this, owners of businesses, entrepreneurs who are thinking. Well, I've got this business going, I've been doing it for six months. There's some opportunities I could chase over here.
[00:17:44] Nick Beyer: There's some opportunities I could chase over here.
[00:17:46] Allen Befort: That's such a great question. And all you hear and you read about is niche down, find your thing, whatever. We would probably be more, our story would be more like a little more open-handed, Hey, where, where [00:18:00] could this go? For us, success is less about what we're doing.
[00:18:04] Allen Befort: It doesn't have to be books. I mean, I've said for years, if we need to ship dog food, we'll ship dog food. Like it's not the, it's not the book thing for us. This is it for us. The environment in our office, the environment in our warehouse, the way our team fits together, the stories I could tell you of the people that have worked here, their journeys, what they've been through, what this place has meant to them.
[00:18:27] Allen Befort: For Tom and I for that founding group, for our leadership team, like. The win for us, success for us long-term has nothing to do with how many books we ship. That's, that is a means to an end. Running a good business, shipping a lot of orders, reporting books, whatever that is a means to an end for us. The end for us is these people that are sitting out here and are downstairs.
[00:18:49] Allen Befort: So I'll take that full circle for us. If I was talking to a founder, I'm saying, what's re, is it really about books? Is it really about dog food? What is it you really wanna do? Well, I wanna run a [00:19:00] good business. That's a great place to be. I'm like, then fi like, let it come to you, chase. Work hard, look grab, go deep in areas do you know, go where you need to go.
[00:19:09] Allen Befort: But it don't be so stuck on, it has to be this, at least our story. Maybe I'm not, maybe I won't offer that as advice in our story. It was not that it had to be books, it's that it ended up being books. If that makes any sense.
[00:19:22] Cameron Clark: Talk about the team in those first four years or so. What the, was it to stay small for a while or did it, I mean, you have a lot of people here now as far as, I don't know how many were walking in and I was, I was shocked.
[00:19:33] Allen Befort: Well, those first few years were very small. I mean, it was, you know, full-time would've been 3, 4, 5.
[00:19:38] Cameron Clark: Mm-hmm.
[00:19:39] Allen Befort: Um, Joel was shipping all the orders out. Richard and I were sharing hotel rooms on sales trips. I mean, it was, you know, Gina was packing every event order, sending it out the door, and then slowly added pieces, you know, once the shipping part picked up, uh, that's where you need more and more individuals.
[00:19:55] Allen Befort: You need more people. And so Sean Morris was a key part of that in that he carried a heavy weight for a [00:20:00] long time, making sure all those orders got out. So the team expanded really in the shipping area. It still needs bodies. That's a still important part of it. Uh, but yeah, those first few years were pretty lean.
[00:20:10] Allen Befort: If I, uh, if I look back at some of those pictures and some of those things, it was, it was pretty lean, pretty tight. We all did a little bit of everything. Keep the lights on.
[00:20:18] Thomas Addington: And that's what founders have to do. That's what entrepreneurial companies have to do. I've often said that if you're an entrepreneurial company and you're in that company and all you're doing is what you are good at doing as a major leader in that company, then you probably won't be around very long in the sense that entrepreneurs have to do all kinds of stuff, including stuff they don't like to do.
[00:20:41] Thomas Addington: And if they only do what they like to do, then probably as the company matures and grows and the need for what it is they do lessens, they probably have to go hire different team to do it. So our team was very flexible, and you have to be when you're an entrepreneur to be successful. [00:21:00] Um, but you do have to double down and really learn some stuff you didn't know before and understand it deeply for sure.
[00:21:06] Thomas Addington: But that, that original group was epitomized that. Mm-hmm. Joel Allen, Richard Gina, uh. We were all doing stuff we really had never done before.
[00:21:18] Cameron Clark: Mm-hmm.
[00:21:19] Thomas Addington: And there's huge joy in that. And there's huge anxiety in that. And
[00:21:26] Allen Befort: pain. Yeah. Some
[00:21:26] Thomas Addington: of those, some of, and there's, and pain, some of the stake
[00:21:28] Allen Befort: came from that.
[00:21:29] Thomas Addington: Pain is probably, pain is probably a better word. Yeah.
[00:21:31] Cameron Clark: How long did it take for the business to become profitable in those early stage? I want, I, I just want people to, people to know this. Like, it's not a,
[00:21:39] Allen Befort: so No, it's a, it's a amazing story. We're a cautionary tale is what we are.
[00:21:44] Cameron Clark: Mm-hmm.
[00:21:44] Allen Befort: Uh, we would, we are gonna be the, we would wave the banner that revenue's a vanity metric, but people love to talk revenue.
[00:21:53] Allen Befort: Oh, we hit this revenue number, we hit that revenue number. That feels good. Pure vanity metric.
[00:21:58] Thomas Addington: Mm-hmm.
[00:21:58] Allen Befort: Uh, your bottom line's [00:22:00] the only one that matters. Now
[00:22:02] Thomas Addington: we didn't know that then.
[00:22:03] Allen Befort: We didn't know that. And that's the thing, I don't know anybody else. We didn't know what we didn't know on the, on the financial side.
[00:22:09] Allen Befort: And so I can tell you we made the Ink 500 list, whatever year that was, 20 16, 20 15.
[00:22:15] Thomas Addington: There were, there were, there were two companies in Fayetteville.
[00:22:17] Allen Befort: Yeah.
[00:22:17] Thomas Addington: One of them here in South Fayetteville. And then we were, we were at the corner of, well we were in Fayetteville. Um, and anyway, so we, we, there were two companies in Fayetteville, in the Inc.
[00:22:28] Thomas Addington: 500 mm-hmm. That were in the top 50 of the Inc 500. We were one because the Inc 500 just celebrates revenue change. Your delta if you're, if you're growing quickly and the percentages of revenue change. That's true. So that automatically means it's gonna be a young company and you're going from less revenue to more revenue.
[00:22:48] Thomas Addington: Yeah. You know, and so the percentage is high. Uh, so we got that award. This other company got that award. They went out of business and we almost went out of business. That's right.
[00:22:58] Allen Befort: Hmm. And it's, that's
[00:22:59] Thomas Addington: the, [00:23:00] it's so revenue. Like Allen said to me the other day, look at this number. And he showed me the revenue number.
[00:23:06] Thomas Addington: I didn't even know what a revenue number was. I don't care what a revenue number is. It's all about, it's all about contribution margin. And it's all about
[00:23:13] Allen Befort: bottom line.
[00:23:14] Thomas Addington: Yeah. Bottom line.
[00:23:15] Allen Befort: But that's what, so that, that season for us, we made that pivot, you know, 2014 and then it was growth, which is great, but that's Ink 500.
[00:23:21] Allen Befort: That was revenue. That was top line. We thought we were. Cats meow. We were flying, we were like, this is great. We're flying. It's a rocket ship. Rocket ship. We're running. What we don't know is it's, it's burning and falling apart underneath. And so, I mean, it got worse and worse and worse as our revenue numbers are going up higher and higher.
[00:23:37] Allen Befort: If I showed cash
[00:23:37] Thomas Addington: was, we had so much cash.
[00:23:39] Allen Befort: Cash was flying in, but there was nothing left over. Debt was piling up on the back end. There was a mess. Our operations were tough. I mean, the, the, the things people carried operationally were, were brutal. It was not a pretty picture.
[00:23:50] Thomas Addington: I have a friend who is, is, is a very, very good financial person.
[00:23:56] Thomas Addington: He's a consultant and I said, Brian, would you mind coming and spending half a [00:24:00] day with us and just helping us understand kind of where we are. We're trying to figure it out. We think we know, we're not really sure. He was with us for two hours and he said, you're about to go outta business. He said, I'd give you less than 50 50 chance.
[00:24:11] Thomas Addington: And we all looked at each other and we said, what are you talking about? He said, you're about to go out of business. Yeah. And he was right.
[00:24:17] Allen Befort: Yeah.
[00:24:18] Thomas Addington: And it, you know. As part of our journey. Yeah. It, it, it's, it, it put us on a path that was very, very difficult and very, very necessary.
[00:24:28] Allen Befort: That was, yeah, 2018, going into 2019 Yeah.
[00:24:31] Allen Befort: Is we had again, rocket ship up Ink 500, all those things that you think are important.
[00:24:36] Cameron Clark: Hmm.
[00:24:36] Allen Befort: But the debts pile, and he tells us this, and then, uh, we, we bring in a guy to help clean up the finances and, you know, the, this is how you know, you don't know what you're talking about. He walks in the first day with me and he goes, Hey.
[00:24:46] Allen Befort: He goes, so are you guys cash or accrual? And I look at him and I'm like, uh, I think we're both. And he just is like, oh, no, what am I getting? What am I getting into? I'm like, I don't know. I don't know. Like they just, you know, there's money that comes in. I don't know what [00:25:00] that means. So he starts digging in.
[00:25:02] Allen Befort: It was like, uh, you know, a spotlight in like those like old rooms where the spider web, I mean, he turned the lights on and it was a mess. I mean, we were in big trouble.
[00:25:12] Thomas Addington: Not, not intentionally. I mean, we had, of course
[00:25:14] Allen Befort: not.
[00:25:14] Thomas Addington: Yeah. We hadn't created a mess, but it was a mess. And it, it is, I think there's a book that we read at that time, and I think it, well, personifies or if that's even the right word, what this journey is, but it, it's a book called Predictable Success written by, uh, Les.
[00:25:32] Thomas Addington: Ew. And you guys probably know it. I, it's not a particularly well written book. No
[00:25:36] Allen Befort: offense, Les, if you want ship it direct, we're happy to, we're happy to ship it direct. But, uh,
[00:25:43] Thomas Addington: but what he does, what he, what he talks about is very accurate, which is the, the different phases that a company goes through.
[00:25:49] Thomas Addington: That's right. And it's probably not original to him, and it's, but it spoke to us. And that is the first phase. You're an entrepreneur. This is hard.
[00:25:57] Cameron Clark: Yep.
[00:25:58] Thomas Addington: Like we have no customers. We have [00:26:00] no revenue. Uh, we think we have a good idea. Yep. Nobody will listen to us. This is hard. Second phase is, this is fun. Oh, yeah.
[00:26:08] Thomas Addington: Oh gosh. Look, people are actually calling us back. Somebody wrote us a check. Let's have a party. But then, and, and, and then if, if that continues, the third phase is whitewater. And in whitewater your wheels fall off. You've got more volume than you that you can handle. You have no, no. Processes. Processes, which means that to solve a problem, it's a person solving a problem as a one-off.
[00:26:35] Thomas Addington: And you, it is there's, and as you grow, there's no way in the world that you can keep up with that. Like you, you can't do that. When you get to the top, which we arrived at after a very, very difficult period of time, it's called predictable. That's what he calls it. Predictable success. And that's where there's this right.
[00:26:55] Thomas Addington: Equilibrium and measure of process and, um, and [00:27:00] innovation. So you've got, you've got you, you're not inflexible at this point, but you do have processes that are adequate and appropriate for where the business is. You've, you found the software program that helps you figure that out. You, you know, you've done that kind of things.
[00:27:15] Thomas Addington: You, you can actually look at a sheet and say, okay, this is what the, that's step one. This is step two. Oh, I'm on step three. Great. Now I know what I'm doing. But in that whitewater period of time where Brian came and said, you're about to go outta business.
[00:27:30] Allen Befort: Oh, yeah.
[00:27:30] Thomas Addington: And we had a, a, a, a financial person who began to help us.
[00:27:34] Thomas Addington: It was, it was
[00:27:37] Allen Befort: dark days.
[00:27:37] Thomas Addington: Dark days.
[00:27:38] Allen Befort: It was dark days. Yeah.
[00:27:39] Thomas Addington: It was very, very difficult. You
[00:27:41] Allen Befort: know, the, the whitewater deal is a great description. It's perfect. I mean, fun was what we were having, but we weren't running a very good business. So people like to work here. It was a blast. This is so fun. We're getting new business, but our, but the business itself was run, poorly run.
[00:27:55] Allen Befort: We didn't have, I mean, we were doing, our best revenue was coming in. It just revenue. We, we would say, uh, [00:28:00] revenue covers a multitude of sins. Just bringing in more money. Bring in more money. What's crazy about the book is, I, there were so many times that I was like, are there cameras in our office?
[00:28:07] Thomas Addington: Like
[00:28:08] Allen Befort: the book, the Predict Predictable Success.
[00:28:10] Allen Befort: Yeah. Success book. I mean, it was so accurate. And honestly, there was a piece that comes because you realize like, oh, we're not the only ones that have done this. We're not, the only ones that have been through this we're
[00:28:17] Cameron Clark: crazy.
[00:28:18] Allen Befort: And so Whitewater, I was like, oh, people are frustrated. There's no processes.
[00:28:22] Allen Befort: The team's starting to cra I'm like, oh my gosh, this is exactly right. And so we walked down that road, get into 2019 and kind of the rubber meets the road on the debt side of it.
[00:28:32] Cameron Clark: Mm.
[00:28:32] Allen Befort: Top line like crazy. Debt building up that we can't get out of processes are in trouble.
[00:28:37] Cameron Clark: Hmm.
[00:28:38] Allen Befort: And so that led to some harder decisions.
[00:28:40] Allen Befort: So that was our first round. That was, we kind of call it it's disaster season. You know, I can show you in our other warehouse, there was a spot that was where, where I would go and cry and pray literally, and was like, God, this is your thing. Whether it's succeeds, it's to your glory. Whether it fails, it's still to your glory.
[00:28:55] Allen Befort: I really hope you pick succeeds. Can we pick that one? But it was, you know, what is this gonna look like? [00:29:00] So we had a round of layoffs in April, our first time we ever did that. Uh, and just brutal, brutal, brutal dark days. 'cause we've built this, our desire to build something we're proud of is we take care of people and people you wanna be here.
[00:29:13] Allen Befort: And so the, the, the lie, the whisper that I heard in my ear over and over was, you hypocrite, you say you care about people. You, you say you think people are important and you're gonna, you're gonna go lay 'em off. And I couldn't wrestle with that. I mean, I can, I sat at Stone Mill and I just cried everywhere.
[00:29:28] Allen Befort: So I was crying at Stone Mill. I was crying in the, you know, but I, what are we gonna do? And this kind of, this, this, this, this phrase that kind of came along or the, you know, the idea that kind of, that, that brought some peace was this thought of if we don't run a good business, there won't be any relationships left.
[00:29:44] Allen Befort: There won't be any people there, there will be no giving tens relationships left to have, if we don't operate a smart, well run, profitable business. Hmm. Now we get to do relationships. So that is when you talk of what do we, what do we want to be? That was the pivot we had to [00:30:00] make. That was the, the disaster we had to get through was, can we survive that shift to try to be a profitable well run business, maintaining a great culture and a great relationships and a place you want to be.
[00:30:11] Allen Befort: And that was a, that was a deep breath from April, 2019 until October, 2019. It was a hold your breath, six months. I had, you know, try to be honest with the team, Hey, this isn't a easy path we're on right now. I'll let you know if things change. Uh, but it was, I mean, it came down to the very end. Let's talk.
[00:30:27] Thomas Addington: It was a very, very difficult, and, you know. A, a phrase we use is to do a good job, you need to, to you to do, to have a you to do a good job, you need to have a good job. Mm-hmm. So someone can't do a good job unless they have a good job. And as leaders of the company through no, uh, you know, nefarious intent on our part, they didn't have a good job.
[00:30:51] Thomas Addington: Mm-hmm. They, they, they. And so we had to create a different, a different model. And I will say this about Allen and about the team [00:31:00] that operates giving toss. They took this bull by the horns and they didn't let go. And they figured it out. Meaning one of our friends, uh, named Tom Muccio, who was one of, he was the original Proctor and Gamble person who came to Northwest Arkansas, had this phrase, he's full of these phrases.
[00:31:22] Thomas Addington: He's hilarious. But one of them is, you gotta walk toward the barking dog. And, uh, which is not a who, who wants to do that. And so. Allen and Joel and the team here really did work toward that barking dog. And it was everything from we have to lay people off. We need to call people we owed money to and see if they would work with us.
[00:31:49] Thomas Addington: Call UPS, call FedEx because we had, you know, they could have shut us down in a day. We're not shipping your stuff anymore. And then, and, and [00:32:00] we had to go to customers and we had to fire some customers. We had to change our business model. In those days, we had a combination of inventory that we owned and didn't own.
[00:32:11] Thomas Addington: We decided we were, and it worked in our business to do this, that we needed to not own inventory because it was too complicated to navigate between, uh, those different options. We had to raise our prices. We, it was, you know, a whole series of things. 'cause when you get to Whitewater to solve the issue, and I would say this is probably true in any organization that is in Whitewater, there are going to have to be many things that change, not just one thing that changes.
[00:32:43] Thomas Addington: And probably almost all those things are gonna be hard.
[00:32:51] Nick Beyer: Let's talk about the season kind of leading up to that. So I feel like we skipped that part a little bit. What. For people who are unfamiliar with your business model, [00:33:00] shipping things like you say, debt piling up. Did y'all buy a warehouse? Are you leasing space? Mm-hmm. What are the, like you run a fairly capital intensive business, correct?
[00:33:11] Nick Beyer: Mm-hmm. Like, try to help people who aren't familiar with your business model really understand like, what was going on. Because we have people might be in a very capital intensive business model, and I feel like we're getting to the part of cleaning it up, but maybe if you could walk through that, how we got there.
[00:33:26] Thomas Addington: One of the things that we, that we, uh, sort of characterized early on is, you know, in, in, in the whole value proposition of getting product to a consumer, you've got, you know, you've got the idea stage. You've got all this stuff up, up front, so you've got content providers, you have, you know, all all kinds of things that, that, things that happen there.
[00:33:46] Thomas Addington: And then on the backside you have some, some pretty gritty stuff. You've got warehouses and you've got forklifts, and you've got stuff that, um, is. You know, we, we, we, in those days, we called it the pretty side and [00:34:00] the gritty side. And we said, we will, we will own the gritty side. So now what we've, we've moved into, if you want to use, that's probably really terrible terminology.
[00:34:09] Thomas Addington: We've moved into the, the pretty side, uh, with a creative agency and that kind of thing, but it was grit. So we said we're gonna, we're gonna have a warehouse, we're gonna have a forklift, we're gonna have a loading dock, we're gonna have racks with product, we're gonna have pallets, we're gonna have people who pick that product, all that kind of stuff.
[00:34:29] Thomas Addington: And. The, one of the problems was we didn't necessarily have, well, we didn't have adequate infrastructure for that. Mm-hmm. Even though we sold business that promised to do that. Yep. So when we, uh, we started at a dentist's office, uh, we rented part of a dentist's office at, at 2 65 and 45 in Fayetteville.
[00:34:50] Thomas Addington: We then moved, um, to, uh, a place space over Jason's Deli, which was a second floor deal. And we had all of our product that were, we [00:35:00] were storing upstairs, there was no freight elevator. So that elevator broke a zillion times.
[00:35:04] Allen Befort: Nothing like bringing pallets up a past
[00:35:06] Thomas Addington: the elevator. And then we moved, uh, to a, to another location.
[00:35:09] Thomas Addington: And when we moved to that other location, literally, and we were growing so quickly, we moved to the other location. We had an office here. I think we were leasing maybe four or five separate places. Mm-hmm. Trying to ship out of. Multiple. We were picking in multiple places, shipping out of one place. Mm-hmm.
[00:35:31] Thomas Addington: And it was, you know, if you could see it, you, you'd be like, seriously, what in the world chaos are you? What are chaos? What are you, what are you people doing? So that's part of it. So then we built a warehouse. We did build a warehouse. And for us, that warehouse was like moving into, uh, uh, a, a phenomenal glorious manifestation of, wow, this is ours.
[00:35:51] Thomas Addington: It's exactly how we want it. It's our fault if it's bad. Mm-hmm. We, we designed it, we built it, and we had our racks and all that kind of things. And we learned all kinds of things [00:36:00] about how you run a fulfillment company there. But it was there soon after we moved, after this history of we grew, grew, grew, didn't have proper infrastructure.
[00:36:10] Thomas Addington: Mm-hmm. Had to figure out all of the processes, um, where we were, we were, we were in trouble.
[00:36:17] Allen Befort: I think if I were to dig in on the business side, if I go less narrative and more business, it's the fact that we were running a low margin, high volume business.
[00:36:25] Nick Beyer: Mm-hmm.
[00:36:25] Allen Befort: So. It takes a lot of capital. It takes a lot of space.
[00:36:28] Allen Befort: It takes, you know, you gain that, you gain some profit there when you're efficient.
[00:36:33] Nick Beyer: Mm-hmm.
[00:36:34] Allen Befort: Efficient use of your people, efficient use of your space. I say all that now in 20 15, 20 16, we didn't know, I mean, we knew it in theory, but we'd never lived it. But yeah, if I were coaching somebody now, I'd be like, well, hold on.
[00:36:46] Allen Befort: If you're a low margin, high volume business, you need some scale. And that's gonna take some, like, you need space for that. You need people for that. But really you need processes to hold that and make it streamlined. You know, I, that was, that's not my [00:37:00] gifting. I named Zach Morgan. He came in and he was the one to say, everybody has to cut their box this way.
[00:37:04] Allen Befort: And at first I was like, why is he making everybody cut the box a certain way? But for him, it was not the way you cut the box. It was making everybody do it one way. You cut everybody's, he literally talked, he ran entire staff, office staff. Everybody had to go down the floor and learn how to cut a box.
[00:37:17] Allen Befort: Here's how we're gonna cut boxes from now on, because it forced us into process. We didn't have any of that. And so when you're running something. Low margin, high volume, that's when you start to gain some room. But we weren't, we were sloppy processes. We were, you know, didn't have the right layout. Our software couldn't do what we wanted and then we have just enough.
[00:37:36] Allen Befort: But this is probably both good and bad. We have just enough maverick in us that we're going, we'll figure it out on our own.
[00:37:41] Cameron Clark: Mm-hmm.
[00:37:42] Allen Befort: There are probably pe, I mean, people have been shipping stuff for years. Plenty of warehouses know how to do it, but we weren't the type to go, well, let's go learn from the ones that know how to do it.
[00:37:50] Allen Befort: We were like, well, I don't know. What do you think? That sounds like a good idea. Maybe we should put 'em on a rack. Maybe we should try this. Like we just were like, we have a, and again, there's good and bad to that kind of maverick nature to [00:38:00] say, well, we'll figure it out. We got it. Little bit confidence in us.
[00:38:02] Allen Befort: Looking back, I'm like, Hmm. Probably could have learned a lot from somebody else. Probably could have, probably could have. Didn't have to learn these lessons such in such a hard way. Probably could have found a different way to do it, but we just are a little wired to do that. But I if again, go, go businessy nuance.
[00:38:16] Allen Befort: I think when you're di in a low margin. High volume, high overhead business.
[00:38:20] Cameron Clark: Mm-hmm.
[00:38:20] Allen Befort: Processes, efficiencies, all those things have to come into play. And we didn't, that wasn't our, that wasn't our cup of tea at the time.
[00:38:27] Cameron Clark: Yeah,
[00:38:28] Thomas Addington: it is. It is a capital intensive business for sure. But I would hate for somebody to think that they couldn't get into that without a lot of excess capital on the front end.
[00:38:41] Cameron Clark: Mm-hmm.
[00:38:42] Thomas Addington: We did not have that.
[00:38:43] Cameron Clark: Yeah.
[00:38:43] Thomas Addington: And it wasn't pretty, but it was, but it was possible. We also had an unbelievable person who came alongside of us, who provided some funding, uh, that was really, really necessary. [00:39:00] It was a, it was a huge amount of funding for us, um, in the world of capital markets. It was not a huge amount of funding.
[00:39:10] Thomas Addington: His dollars helped us do some things that we couldn't do. We could never have gotten here without, without that help, but even in a cap, at least in this capital intensive business. Mm-hmm. Like if we had said, if we had a picture of this warehouse and said, this is what you gotta have to make this work, we would never have started, never in a million years.
[00:39:34] Thomas Addington: Um, if somebody. Went. If somebody who has this a, a facility like this went and had little snapshot pictures of everything we did to get here mm-hmm. They would say we're never doing that. Right. So it is this combination of So good flexibility and of, um,
[00:39:57] Allen Befort: naivety. Not really
[00:39:58] Thomas Addington: of naivety. Well, it is. [00:40:00] It is.
[00:40:00] Thomas Addington: That it, it, there's, there, there, there, there is that, I mean, Allen says, you know, well we could have gone to learn from other warehouses and I'm sure we could have, but I spent a lot of years in warehouses. 'cause I was a truck driver when I was in college. And in graduate school to earn money. I was an over the road truck driver.
[00:40:18] Thomas Addington: I was in warehouses all across the country and saw what the culture was in those warehouses. Also saw, saw the very, uh, kind, the kind of complication where they segmented every single task. You had people who picked, there was a, you, you know, you got charged when you received product, when you shipped product, when you, uh, shelved product, when you, you know, all that kind of stuff.
[00:40:45] Thomas Addington: And one of the things that we decided to do, partially because of that experience I had had was we're gonna provide a very simple financial, uh, [00:41:00] template for our customers. Mm-hmm. So they're not getting billed. Mm-hmm. This, this, this, this, this. We're gonna make it easy. Our, our metaphor was, we'd like this to perform for them.
[00:41:09] Thomas Addington: Like a Nest thermostat does on the wall where it's not complicated.
[00:41:15] Cameron Clark: Hmm.
[00:41:15] Thomas Addington: It does a lot of stuff and it takes the complication on itself mm-hmm. To make it happen. The other thing that we decided to do is we decided to try to create a culture here that did not have this bifurcation between people on the floor and people in the office.
[00:41:32] Thomas Addington: 'cause all of those places where I went, uh, my name was Driver, Hey Driver, um, and people who worked in the floor, usually in an un-air conditioned space. It was in the south, it was heated, obviously it was in Minnesota, in the north. But, uh, you know, there was this, there were the office people and there was everybody else.
[00:41:53] Thomas Addington: And those two, those two cultures, they were different. They did not meet. We decided we were doing it different [00:42:00] and we've been very, very intentional about that. So. You know, I think as an entrepreneur you learn a a bunch of stuff and you do really gain a lot by seeing how other people do it. We place high value on that.
[00:42:13] Thomas Addington: At the same time, other people don't always do it. Awesome. And other people don't always provide a great customer experience. And so figuring out how to do that. In a fresh and compelling manner in an old and legacy industry. That's not necessarily bad either.
[00:42:29] Cameron Clark: That's
[00:42:29] Allen Befort: exactly right.
[00:42:31] Cameron Clark: Well, let's talk about like post whitewater season.
[00:42:34] Cameron Clark: Um, the, so is that like October, 2019, is what you're saying was come, coming outta that? Or is like
[00:42:40] Allen Befort: Yep.
[00:42:41] Cameron Clark: Because I mean, I mean, I would assume that y'all just exploded during COVID with the, the business model. Is that what is that What happened is that
[00:42:49] Allen Befort: Yeah, you're right. So October, 2019 I got a phone call from our biggest vendor.
[00:42:54] Allen Befort: They said, if you don't pay us by Saturday, it's over. And I mean, I was like, it's done. And we had this investors [00:43:00] say, Hey, I'll help you on that last payment. So I wrote one more check and then from there it took off. And so COVID was a bonus for us. Everybody was staying at home and they were ordering things online.
[00:43:08] Allen Befort: So that helped a ton. Uh, we had some of the bestseller world, that whole bestseller side of what we do. It had a great year and we look back and for us. There's a spirit, there's a very big spiritual part for us. We have a Christian worldview that's a part of our story. It's a part of what we believe. And for us, we, we call 2020 and 2021 the miracle year because we had in, you know, insane amount of debt.
[00:43:32] Allen Befort: Tons of debt. And you're like, man, if we just make a hundred grand next year, wow. And we were, and then I look at that, but when you look at the stack of debt, you're like, how many years of a hundred grand until we dig out of this hole? I mean, that's the situation we were in. And in a year and a half,
[00:43:46] Cameron Clark: sh.
[00:43:47] Allen Befort: We got caught up.
[00:43:48] Allen Befort: And that's what's, that's what for our story, it's hard to take a lot of credit for that.
[00:43:52] Thomas Addington: Mm.
[00:43:52] Allen Befort: That it just happened to work that 20 20, 20 to 21, this kind of miracle year for us. Everything hit a certain project came in, a certain client [00:44:00] came in. You know, one guy says, I wanna pay you to do all of it. And you know, we gave him a good, good, good, good price.
[00:44:06] Cameron Clark: Yeah.
[00:44:06] Allen Befort: And he took it and said yes. And all of a sudden we're all going, I can't believe this. Oh my goodness. So there are some things that happened in that that, that run that couple years that we can't explain. I mean, innocent, we can explain, but at the same time can't explain. And it just, it swung the pendulum.
[00:44:21] Allen Befort: Now we're, we're like, wow. We know what we're doing. We're profitable. We know who we're going after. We know how to run that chunked off all that debt. We're healthy, we're stable, we're ready to run.
[00:44:30] Thomas Addington: And we made a commitment we will only grow. We, we will grow, but never at the expense of profitability.
[00:44:37] Cameron Clark: Mm-hmm.
[00:44:38] Thomas Addington: So that's where we're like, who cares what the top line is? Mm-hmm.
[00:44:40] Cameron Clark: Yep.
[00:44:41] Thomas Addington: We care only about contribution margin and bottom line. Yep. And, um, we drew a line under our, our experience, uh, from the point where our debt was paid off and before, and we said we're never going back [00:45:00] again. To the extent that we have any control over it, we, we, we, you know, got, uh, Jesus got us out of this and we're gonna make sure that we've learned our lesson and we are going to be extremely choiceful, careful, metric driven.
[00:45:19] Allen Befort: Hmm.
[00:45:20] Thomas Addington: In our approach going forward. And, and Allen led the charge on that. And Joel and Zach are both really, really good with numbers and Garrett is unbelievable with sales. And you've got there the. The, the, the nexus or the core of a team mm-hmm. That can really make things happen.
[00:45:44] Allen Befort: Mm.
[00:45:44] Thomas Addington: Um, because it's a commu be because we, we, because I think we're solving people's problems.
[00:45:53] Thomas Addington: We, we've got a lot of help from, from Jesus. Um, we have really, really great community here, [00:46:00] which these guys are unbelievable in, in creating a sense of belonging. And, you know, I don't have to come and work here every day, but I want to come and work here every day. Mm-hmm. I'm, I've got another thing I do, but I do it from here 'cause it's so life giving.
[00:46:16] Thomas Addington: Mm-hmm. You're here. It just, who wouldn't wanna be here? It's just fantastic. But it's still a very, it's, it, it's, it's a real business though. Mm-hmm. Like, there's. There's a lot of fun, but there is an awful lot of productivity that happens in these walls. And, um, but we drew a line and we said, we aren't, we aren't going backwards.
[00:46:37] Allen Befort: Take a, you know, I'm a NBA fan, right? Mm-hmm. Big Oklahoma City Thunder fan. So that's been true for a lot of years. I grew up in Oklahoma, so I survived the KD Russ, when we that happened. Now we've got the new wave, right? But what their basic, their understanding what they kind of say, the Thunder organization as well as the Spurs, who Sam Presti shout out greatest GM ever to exist.
[00:46:59] Allen Befort: [00:47:00] Uh, he came from the Spurs organization, but their phrase was sustained success. The idea of the Spurs, the idea of the thunder is we wanna be long-term successful. We may not win the championship one year and then be the last place team the next year. We wanna be really good. So literally, that's what we adopted that line in the sand was we're the spurs, we're the thunder.
[00:47:18] Allen Befort: We want to be long-term successful. That does not mean we're rocket ship. Let's get bought next year. We're trying to be acquired. Whatever that meant, long-term profitability, sustainable, might have a good year, might take a chance. We're not gonna take a chance that risks our bottom line, but we might take a chance that risks, you know, next year compared to the year before that.
[00:47:36] Allen Befort: Mm-hmm. But we're gonna take a little more of a steady approach. So if I, if I could graph it out right, it would be constantly going up, but it might have years that go up and down. Mm-hmm. Oh, that was not as good a year. We built a building last year wasn't as good. Mm-hmm. We built this building, had to move into it.
[00:47:48] Allen Befort: Lots of expenses, lots of stuff. Well that's okay, but we think that's gonna come. But it didn't risk. It didn't put us at risk profitability wise. So a little bit of that idea, a little bit of Oklahoma City Thunder, uh, sustained [00:48:00] success was kind of this underlying thought, Hey, what if we ran this in a different way?
[00:48:03] Allen Befort: Now we, we don't take such big swings. We're in trouble. We don't put ourself in a position to be back where we were. Let's make smart decisions along the way. Make sure we're running a good thing.
[00:48:13] Nick Beyer: And in that, talking about risks, there was an acquisition five-ish years. It was, it, mm-hmm. Polymath.
[00:48:18] Allen Befort: Mm-hmm.
[00:48:19] Nick Beyer: Mm-hmm. Mm-hmm. That was five-ish years ago.
[00:48:20] Allen Befort: 2020, yep.
[00:48:21] Nick Beyer: Okay. Yep. Talk a little bit about that.
[00:48:23] Allen Befort: So we had just come out of, I mean, we had just come out of disaster. I mean, we're talking, this is, this was October of 19. We didn't think we'd make it in May of 2020. He calls me, is COVID, we're all at home. And I get a call and he's like, Hey, you think we want a creative agency?
[00:48:38] Allen Befort: And I'm like, wow. I mean, that's kind of in the vision, but we're still in debt. We're still digging out. He's like, well, you know how God works around here. Something's cooking. And he's like, I need to get you on the phone with somebody. So all of a sudden we start talking to a guy. He had this wonderful creative agency called Polymath.
[00:48:53] Allen Befort: He was needing a new shepherd to take it. So we were talking through if that was the right fit for us. It, it worked out, it fit. [00:49:00] So we acquired that, you know, August, 2020, you know, through the rest of that year, and tried to kind of morph that into what we were doing. Serves the same clientele, content driven brands, nonprofits around the world.
[00:49:11] Allen Befort: Can work with authors, you know, it, it fit really well with what we were doing. They were all remote, um, which is a little new for us. Um, but had a business they were already operating. Uh, they do websites and, and, and video work and, and all this different type of stuff.
[00:49:26] Thomas Addington: Animation.
[00:49:26] Allen Befort: Yep. And a ton of animated work.
[00:49:28] Allen Befort: So do a ton of great things. It kind of fit in our world, but definitely a new stretch. First of all, we are just coming out of, are you really sure this wasn't a stretch. And the way we structured the deal, it didn't put us in a profitable worry, but it was still, Hey, here we go. This is a new thing we're gonna try.
[00:49:41] Allen Befort: And then operationally it stretches you. 'cause it's a whole new way to lead a team. This is remote, these are a different team. They already had a culture. How do you, how do you morph everybody in, you know, all those types of learning curves, 20 21, 20 22. Trying to figure that one out. But they've kind of, you know, we kind of merged that in, brought that into what we do and it's a, a, a important pillar of our world now, [00:50:00] uh, as its own brand and as a part of a service we offer.
[00:50:04] Cameron Clark: That's awesome. Well, ne ne next phase here. So, miracle years. Talk about,
[00:50:10] Allen Befort: man,
[00:50:10] Cameron Clark: you know, 22, 23 to now we're at the beginning of 26.
[00:50:14] Allen Befort: Yeah.
[00:50:15] Cameron Clark: What have, what have these years look like? How has the offering changed in that, in that period? Maybe the, the team a little bit too. How did, what did that change look like?
[00:50:24] Cameron Clark: Give us some of that.
[00:50:26] Allen Befort: I, you know, if I were to talk, this phrase has been health instability. This phase 2021 and on is health instability. We're a healthy business. We pay our bills. We've, we're on, you know, all those things that weren't true and we are in trouble. And now it's like, man, we're running this thing.
[00:50:39] Allen Befort: It's really happening. Uh, so now we're looking at how do we grow? Well, where do we wanna put our, our efforts? Where do we wanna put our eggs? You know, do we wanna be only in one of these buckets, do we want to diversify our revenue streams? One of the things we talk a lot about is having different types of revenue streams within our.
[00:50:55] Allen Befort: Our umbrella. So, you know, if I, if we talk about fulfillment, right? Low margin, [00:51:00] high volume, but it's pretty consistent every month those orders have to go out. It's a sticky business. It's hard to leave your warehouse. There's that. But the creative business is the complete opposite. It's project driven.
[00:51:10] Allen Befort: It's, uh, feast or famine. One year you have a great project year, the next year you got nothing. So those are two different business models, two different revenue models, all in one. So we talk quite a bit of, well, what I kind of wanna do is what if we could build a model that has different revenue models all within one, if that makes sense.
[00:51:26] Allen Befort: Well,
[00:51:26] Thomas Addington: and different and different cycle sale, different revenue cycles even during a year.
[00:51:31] Allen Befort: That's right.
[00:51:31] Thomas Addington: That's right. So you, so you have, you know, obviously in the fulfillment business. The consumer fulfillment business like we are. You know, there's a huge, uh, you know, at the end of the year, at the beginning of the next year, that's, that's, it's, it's a huge bond.
[00:51:44] Thomas Addington: November
[00:51:44] Allen Befort: to similar or massive for us. Tons of effort goes in and then
[00:51:47] Thomas Addington: they're, then they're slower,
[00:51:47] Allen Befort: but April and May, um, we're, you know, we're, we're barely shipping anything out. There's so much less going on. So how do we find a model that can help cover us cashflow wise? How do we find our profits? So, you know, we use a lot of that different thinking of what if our [00:52:00] fulfillment business could cover our overhead for the year?
[00:52:02] Allen Befort: And then all of these other lines are the ways that we generate extra income and, you know, generate profit in different ways. So really thinking through, we on Purpose said we don't want to be just a fulfillment company.
[00:52:13] Cameron Clark: Mm-hmm.
[00:52:13] Allen Befort: We, on purpose said we wanna serve in multiple ways, the right type of clients, and then, you know, have different pieces we do for them.
[00:52:21] Allen Befort: Different revenue models, different types of businesses, but they all fit around one audience. So we would say, you know, that's that content brand idea. They're the center of the bullseye. They're the house with the, you know, the biggest house in the village. But now we want to go multiple things around them that have different models included.
[00:52:36] Allen Befort: So that's been what we've been doing really since 20 20, 20 21. I mean, the, the addition of polymath was part of that.
[00:52:42] Thomas Addington: Hmm.
[00:52:42] Allen Befort: Well, let's add a creative agency to this. That's a different revenue model. It's another service to that same audience. We launched our own product development side. Well now we can help you print that book.
[00:52:52] Allen Befort: We can help you get your book made. You're already, we're already shipping your book. Why don't we help you print it? You know what we trade on? What, what we're best at is relationships and trust. So why don't [00:53:00] we help you? We'll, we'll help walk you through the book printing process. And then it became, well, okay, now that you're running an e-commerce website, maybe we need to help you run yours for you.
[00:53:07] Allen Befort: You don't want to update your Shopify, you don't wanna deal with customer service. We can come along and do those things for you. So we started adding some of these things that everybody needed, that they were already doing. And not everybody needs all of 'em. You know, they, you know, you could use this a la carte, we just need you for fulfillment.
[00:53:21] Cameron Clark: Yep.
[00:53:21] Allen Befort: But you could use this across the whole thing
[00:53:24] Cameron Clark: is, is your biggest, I mean, call it competitor, just people just bring all that in house, bring.
[00:53:31] Allen Befort: That's interesting. You know, I probably look at it and I would say competitors for me, feel like they're in each of those different buckets. It's hard for me to see, and I don't mean this in any, in any any way with any pride or, or arrogance.
[00:53:44] Allen Befort: I don't know very many people that are doing all of these in one in one place.
[00:53:49] Cameron Clark: Oh, very different. They're, yeah. It's hard.
[00:53:50] Allen Befort: And so it's saying, we're gonna be a service provider across multiple things you need, where we have fulfillment competitors.
[00:53:58] Cameron Clark: Yep.
[00:53:59] Allen Befort: We have [00:54:00] creative agency competitors, we have product development competitors, but I don't know very many that are saying, oh, we're all of these all in one?
[00:54:09] Allen Befort: And I'd say unique. Value prop for us, but then the same breath, we're also okay to just offer one of 'em.
[00:54:15] Nick Beyer: Hmm.
[00:54:15] Allen Befort: You know, if somebody comes along and goes, I'm already gonna print my books, I already, I already got that figured out. Great, no worries. But you need us to help you ship 'em. Yeah, that'd be great. You know, your rate, your shipping rates are great or man, you guys are gonna be more efficient than we are at it.
[00:54:26] Allen Befort: You know, all those types of things. So I don't know of very many that have put this whole thing in one place. Um, kind of a holistic approach.
[00:54:33] Nick Beyer: Yeah. The pricing on them is different across the board.
[00:54:37] Allen Befort: Yep.
[00:54:37] Nick Beyer: Okay.
[00:54:37] Allen Befort: Yep. Now each of 'em have their own pricing. Yep. We can price everything different now if we need to, but what's beautiful about it is we can trade those off and on.
[00:54:45] Allen Befort: If I know fulfillment's a valuable thing, 'cause you're gonna be here for a long time, then I might give you a break over here on the books I'm printing or I might go the other way and go, I'm gonna charge you a little more on the books you're printing and not charge you a fulfillment fee. 'cause I already made it on all the books.
[00:54:58] Allen Befort: So what's beautiful is [00:55:00] now we get to start using the certain, we're already paying for people to ship your order every day. The warehouse is already paid for. So if I can get you to print the book with me. That's way more valuable for me now 'cause that cost doesn't change. My fixed costs down here aren't gonna change.
[00:55:13] Allen Befort: But I get your, your book printing, but I can give you fulfillment for free. So it gives us a lot of flexibility when you have different models. We just got done with a project, uh, for a college. We've been doing a lot more. The creative agency we have is doing a lot more with higher ed, and this group needed something across everything.
[00:55:29] Allen Befort: So they were saying, we need website, video, we need a book and box, like a special kit that we're gonna mail to all our people and we need you to ship it. So, I mean, that was, it is three or four of the different things we do all in one. And we could move that pricing model around, you know what, fulfillment's free.
[00:55:43] Allen Befort: Don't worry, we'll throw that in. Well that sweetens the deal. But when I look at the bottom line, it doesn't affect my cost. The team's already down there shipping. It's not that many extra orders. So it creates a lot of room. This is where it gets fun for me. 'cause now you're going, okay, wow. How do we move this thing around?
[00:55:57] Allen Befort: What could we offer? How do we, how do we, how do we [00:56:00] shift things like that?
[00:56:00] Thomas Addington: It becomes very difficult for somebody else to be competitive. Mm-hmm. If that whole range of services Yeah. Are required. And if we look like a solution for a, for a customer and the hardest of all of them to do, in my opinion, I'm sure maybe others would have a different opinion.
[00:56:21] Thomas Addington: Lemme
[00:56:21] Allen Befort: just see which
[00:56:21] Thomas Addington: one you say is the gritty part.
[00:56:22] Allen Befort: That's right.
[00:56:23] Thomas Addington: It's the gritty part. It's the capital intensive. Stuff out running a warehouse pallets or, or racks that, that, that go up. I don't know how hard Oh yeah. How, how tall? 30
[00:56:34] Cameron Clark: 40 feet?
[00:56:35] Thomas Addington: Yeah. 30, 40 feet.
[00:56:36] Cameron Clark: Yeah.
[00:56:36] Thomas Addington: You know that, that's the hardest part.
[00:56:38] Cameron Clark: Mm.
[00:56:39] Thomas Addington: If you can, if you get that and you can then morph and make a transition to also include the pretty part.
[00:56:45] Cameron Clark: That's right.
[00:56:46] Thomas Addington: Creative agency. We acquired a, a, we, we acquired a consumer brand, uh, a couple of years ago. Our first foray into that where we actually own a brand, which we had not done before, [00:57:00] so we could learn, um, it's an already existing brand, uh, and we were already fulfilling that brand and they wanted to sell it and we said, well, maybe we'll buy it.
[00:57:07] Thomas Addington: So, but if we can offer that range of services across and we have the ability to, uh, triage pricing on any single given thing across that whole enterprise wide offering that. That makes you feel good as a, as a, as a competitor.
[00:57:27] Allen Befort: Yep. Yeah. Well, and, and really what I think we're noticing now, what we're seeing is, uh, if, if the last, we would say from concept to creation to customer, if those are kind of the three phases of our, our, our offering or maybe even who we work with, the customer parts.
[00:57:43] Allen Befort: The last thing when we ship an order out, that's, that's we're the last ones to touch it before it hits the customer. If we, uh, help you run your website that's near the customer, if we help you print your book, that's helping you create something. If we're making a video for you that's helping you create something, what we are seeing [00:58:00] is our next opportunity is to move further up that stream, move further upstream into that concept idea.
[00:58:05] Allen Befort: And, and, and this is the, this is speaking to, let's help you understand what you could do.
[00:58:10] Thomas Addington: Yeah.
[00:58:10] Allen Befort: If we could help you with the concept stage and knowing I could, I could be a consultant for you for free on what you could do with your brand. I mean, I talked to a group recently. They are, you know, major podcasts have a huge following, but they don't know how to monetize it.
[00:58:24] Allen Befort: They only make money through ads on their podcast or through their affiliate links. Mm-hmm. So they're, they're, they're influencers. They have a big following. They have content, but they don't have a commerce engine outside of affiliate links and ads. Wow. And so we're looking at them saying, here, let me walk you through the concept.
[00:58:39] Allen Befort: Let me paint you a picture of what it could be for you to have. A digital course for you to have books that you sell, for you to create a planner for your following, for your audience, for you to, like, these are all things you could do, create that, that paint that picture for them at the concept level.
[00:58:54] Allen Befort: Because then they go, okay, well who's gonna do it? You know, the way we'll talk about it is, is, is a builder [00:59:00] analogy. I'm sure this isn't anything new, but it's the architect, the general contractor, and then the sub. And in a sense, what we're saying is we started our business on the sub side, and that's the ugly one.
[00:59:10] Allen Befort: The messy one. The gritty one. Most people want to be the architect. I'd love to be a consultant. Right? Man, it'd be great to be a consultant. I just come in and I talk and I mean, I, no offense consultants, no offense. Um, but I'd love to be that. We all would love to. That sounds great. Right? I get to go around.
[00:59:24] Allen Befort: We basically started on the other end and have been working our way upstream. Mm-hmm. Again, none of this was on purpose at the time, but now I can look back and be like, oh, this is what we were doing. Uh, we started with the gritty. We started with the subcontract. We're the plumber, we're doing the work.
[00:59:36] Allen Befort: Mm-hmm. We're installing the pipes. We're shipping the orders. Oh, now we can print your books for you. Well, that's a little bit further upstream. That's still pretty gritty. Well, now I'm building your website. It looks pretty, but actually somebody's gotta go in there and code it and create it and edit and cut.
[00:59:48] Allen Befort: You know, we know all that. You know, we are working our way upstream and now earning the right, we're earning the opportunity to have that concept conversation, that consulting conversation. Let us build you the blueprint. Here's what your content brand [01:00:00] could be. NWA founders. Here we go. I'm gonna paint you the what you could be, your podcast is the top of your funnel, but then you're gonna start a cohort group and people are gonna pay you to be a part of your founder cohort group.
[01:00:09] Allen Befort: But then you're gonna have a book that feeds that through this, you're gonna sell your book online and that's gonna lead to your, you know, and that's your content brand funnel. Now I've painted a picture and you're gonna say, well, who's gonna do that for me? We'll be their gc. Now you pay us, we'll start doing that.
[01:00:23] Allen Befort: We'll help build all those emails out. We'll help build all that structure. Well, who's gonna print the book for you? We'll do that too. Who's gonna run the e-commerce story? You know, then we, we go all the way downstream. So that's, if you were, what am I excited about now, looking forward, where am I 25, 26?
[01:00:36] Allen Befort: I'm going, we need to look upstream, paint pictures for people of what they could do. We don't need to get paid for that 'cause we'll get paid for it, you know? Sure. Downstream along the way. So
[01:00:46] Nick Beyer: are any of those revenue models. Uh, based off of like a revenue split. If you were to do, if you were to go from concept mm-hmm.
[01:00:54] Nick Beyer: All the way downstream, is any of that, are you, is there any upside or is it just, Hey, business models, b [01:01:00] based off of all those,
[01:01:01] Allen Befort: we have only and exclusively been service.
[01:01:04] Nick Beyer: Okay.
[01:01:04] Allen Befort: Pay for the service. Pay for what we do. This is your, and it's comes back to the original premise, which was you as the content provider, deserve the biggest house in the village.
[01:01:13] Nick Beyer: Mm-hmm.
[01:01:13] Allen Befort: You need help doing it. We can help you. We're happy to get paid to do that, but you deserve the biggest house in the village. Everybody in that industry, especially if you get into the large author industry, you get into the, uh, content creator, industry, influencer world, everybody wants a percentage.
[01:01:28] Nick Beyer: Mm-hmm.
[01:01:28] Allen Befort: I'll do a deal with you, gimme a percentage, I'll do a deal with you. Just gimme a percentage. Like everybody wants that. So it's actually to our benefit. We sell it the complete opposite. Mm-hmm. Hey, we know everybody wants a percentage. We just want our service fee. We're happy to help. Now say all that.
[01:01:44] Allen Befort: We're open to the right situation. If somebody wants to have that conversation, we just won't push it. It's not dependent on that. Yeah. But the right author comes along and says, what if we did this together? I don't want to, I don't wanna take the risk on the books. I don't wanna go print all the books.
[01:01:56] Allen Befort: What if it doesn't sell? And I'm gonna show 'em all the numbers and be like, you should, you [01:02:00] should. And then finally I'll say, okay, what if I print the books? I'll pay for the print, but I wanna share, I wanna ride along now with it. Yeah. And they we're open to that model. But our, our bread and butter, the way we're designed, who we are, you get the biggest house in the village.
[01:02:16] Allen Befort: We'll take our service feel and, and, and, and feel great about that.
[01:02:19] Cameron Clark: It's awesome. How many people do y'all have now?
[01:02:23] Allen Befort: You know, on a normal day, we're gonna be in the 40 to 50 range. And I say range 'cause we'll have, you know, part-time help on the floor. We'll have, you know, full-time help in this, this place, that place.
[01:02:33] Allen Befort: We'll have different people. Uh, but you know, on a normal standard day, we're in that 40 to 50 range. Um. But if you came by here in November, there'd be 90 people on the floor, maybe a hundred just on the floor. And so that's how much this peak comes. I mean, it comes in massive waves. So we, you know, grab college students as part-time jobs.
[01:02:52] Allen Befort: We use, you know, uh, seasonal staff, you know, temporary staff to kind of handle what needs to happen on the floor. So at any given time [01:03:00] we're in, you know, we could be at 90, a hundred, but, you know, if you said, who's your core team? Our core team's in the 40 range.
[01:03:06] Nick Beyer: Okay. Um, over the next five years, do you think growth is coming from that enterprise model you just kind of walked through?
[01:03:17] Nick Beyer: Or is there a segment in that, in that enterprise model that you're like, you know, if we extrapolate out the last year, last two years, over the next five years.
[01:03:26] Allen Befort: Right,
right.
[01:03:27] Nick Beyer: That's where a lot of our growth come, come from. I'm interested where
[01:03:29] Allen Befort: you'd go.
[01:03:29] Thomas Addington: Well, I'm, I'm, I'm not gonna answer the question, but I'll provide some context.
[01:03:33] Thomas Addington: So when we moved into our previous warehouse, which we also built, which is in Johnson. Um, much, much, much smaller than this one, but still really big for us at the time. Allen said to me in the conference room, okay, he said, we're here. We, we did the he of the will. We got this thing done, it's finished, we're all moved in.
[01:03:53] Thomas Addington: This is it. This is it.
[01:03:55] Allen Befort: We're good. This is
[01:03:57] Thomas Addington: it gonna be great. And I just looked at him and I said, well, [01:04:00] you're in charge. You have the right to um, you have the right to an opinion about that. But I said, what happens if we get full and then somebody needs something? Yeah. And it's gonna require a bigger infrastructure Are are what, what, what decision are you gonna make?
[01:04:19] Thomas Addington: So
[01:04:20] Allen Befort: 10 years later, you were proven
[01:04:21] Thomas Addington: right? We, we, well, and so we went from that one warehouse that we couldn't fill to, it was full to now we're leasing in three other warehouses in northwest Arkansas. Again, we're back to kind of where we were before, which we had product everywhere. We're trucking this stuff around every day.
[01:04:37] Thomas Addington: Even if we were fulfilling, uh, primarily out of one, some out of, uh, a second one. So I would say to Ellen the same thing. Okay. So now we have this, whatcha gonna do? Yeah. We have this warehouse, which is huge for us, not big for people in the warehouse world, but huge for us. What happens if this gets full and or if other business [01:05:00] opportunities Yeah.
[01:05:00] Thomas Addington: In the zone come up and don't require us to compromise on profitability. What will, what will we do?
[01:05:07] Allen Befort: Oh, I think, I think we're good. I think we're,
[01:05:08] Thomas Addington: yeah.
[01:05:09] Allen Befort: This is all we need. So I got plenty.
[01:05:10] Thomas Addington: I've heard that before.
[01:05:12] Allen Befort: The, uh, it's a good question. I think the fulfillment side's hard because it is capital intensive.
[01:05:19] Allen Befort: There is more risk there. So I'm hesitant to say we're gonna keep growing. We're going after fulfillment. You're competing with Amazon, you're competing with ShipBob. I mean, the three PL world is massive and it is a race to the bottom on price. So that is a scary one as a industry. Mm-hmm. To be a boutique fulfillment center.
[01:05:37] Allen Befort: Small, there is a real, there's a real conversation economically. Like how do you, how do you compete against that other world? So, but I, you know, if there's opportunity, we're always gonna grow. We're gonna go there. I think the other ones have better margins, they have better opportunities, whatever. But there, you know, there's its own competitive nature in those.
[01:05:54] Allen Befort: So don't have a good answer for you on that. We literally talked about it in the past week or two saying, Hey, [01:06:00] what's this look like? Where do we go from here? Where does it come from? And we're saying, when we look at our, if the goals we want to hit, we look and see it across all of 'em, pretty much on purpose.
[01:06:09] Allen Befort: This one needs to grow here. This one needs to grow here. This one needs to grow here. Uh, I would say our vision isn't, it's that one. Fulfillment's the one or creative. That's the one. It's, no, it's this one. This one little bit of this one little bit of this one. And then our nature all along has been, we look for the next opportunity.
[01:06:25] Allen Befort: Mm-hmm. I mean our, our, our deal all along has been some other opportunity comes along our job's to steward that opportunity. Steward the idea. Yeah. So. Sometimes we have plenty of stories of things we tr thought were good, that were good for a time and aren't good now. Sure. And so the next one of those may come along tomorrow.
[01:06:42] Cameron Clark: Mm-hmm.
[01:06:42] Allen Befort: That we're like, Ooh, that idea. And we will steward that idea and try that. And it may turn into the one. Mm-hmm. And we look back and we do this conversation in another 10 years from now. It was like, I can't believe that we didn't even know about this thing. And that's what took you guys to the next level.
[01:06:56] Cameron Clark: Mm-hmm.
[01:06:57] Allen Befort: But we're open to that, but in the meantime, we're gonna be, you [01:07:00] know, kind of faithful step by step on the things we have kind of chasing that world. So I, I don't have a good answer for either of you. Uh, I'd say we're gonna plug along, uh, and chase, you know, chase our goals, but it's gonna be, you know, kind of across all of them.
[01:07:15] Cameron Clark: And do you have fulfillment outside of Northwest Arkansas? Right now
[01:07:18] Allen Befort: everything's outta here, so it comes right outta this building, you know, we'll do about a million orders a year, so.
[01:07:23] Cameron Clark: Wow. Yeah, that's, I mean, so I want to kind of segue, we're getting toward close to wrapping up, but Northwest Arkansas, I guess you, you could have other spots, other places, why your business here?
[01:07:37] Cameron Clark: And then what do you tell somebody else? Why build a business in northwest Arkansas?
[01:07:44] Thomas Addington: Well, our business is here because we lived here, but that isn't the end of that. Conversation.
[01:07:52] Cameron Clark: Mm-hmm.
[01:07:53] Thomas Addington: It is also a great place to build a business. I think it's very, very unique. When I look back, we, we arrived in [01:08:00] northwest Arkansas in 1989.
[01:08:02] Thomas Addington: I was, came to teach at the University of Arkansas. We rolled into town. It was a very rainy day, and I said to Susan, I said, what my wife? I said, well, I said, I'm willing to move here as long as I don't have to only be here. Like, if this can be a base of operations. And in my head to my, I said to myself, I'd like to seek my fortune here.
[01:08:24] Thomas Addington: You know, you say things like that to yourself. Um, in 1989, there were no companies in northwest Arkansas co-located serving Walmart. So there were no vendors here. To my knowledge, I, there wasn't even one. And maybe there was, I mean, maybe mm-hmm. Maybe Anderson was here as, as, as the, as the, the book company supporting Walmart.
[01:08:48] Thomas Addington: I'm not really sure, but in notionally what it was today. Yeah. Directionally I'm, I'm, I'm accurate. And what happened is Northwest Arkansas is built on entrepreneurial, you know, [01:09:00] basically we have Walmart and Tyson and JB Hunt are also, are all, all three of them are second, third generation entrepreneurial companies.
[01:09:09] Thomas Addington: So you have this very vibrant economic foundation that is already here and is part of the DNA When everybody moved into support, Walmart, p and g was the very first of those. Organizations that did that at any scale. Um, all of a sudden you had this massive influx of high, highly developed talent coming to Northwest Arkansas, who for some reason thought it was a, a pretty good place to live, and they got a little bit of a taste of that entrepreneurial flavor in northwest Arkansas, and they did not want to leave.
[01:09:49] Cameron Clark: Mm-hmm.
[01:09:49] Thomas Addington: And somewhere, somewhere, someone, somewhere up in Bentonville did this. You guys may know, but they did this map of where entrepreneurial companies in Northwest Arkansas have come [01:10:00] from and, and the, it's a map of relationships and it's a map of companies. And if you just look. At p and g is because I worked in that early, those early p and g days, uh, as an aide to p and g with Tom Muccio and that early team that was here.
[01:10:19] Thomas Addington: You know, you look at the people who left p and g and where they are today, you know, Saachi and Saatchi X
[01:10:27] Cameron Clark: mm-hmm.
[01:10:27] Thomas Addington: Was Annie Murray worked at p and g, then he worked at, at Dayspring. He actually came and worked for Steve Graves and myself. And then he started a company, which was Thompson Murray or Brand Works, I guess it was Brand Works.
[01:10:39] Thomas Addington: Thom Murray. And then became Saachi and Saachi X. That's a very entrepreneur, it's a global entrepreneurial organization. Mm-hmm. If you look at, uh, Rick West and Henry Ho and, uh, bill Waitman, they left p and g, they started North Star, which then became Field Agent again, another global company. Bill Waitman left and he [01:11:00] went along with Ross Culley and, uh, Dan Orangeberg, and they founded Harvest Group.
[01:11:05] Thomas Addington: A, uh, another company that is, it's a, it has a massive footprint and impact and influence in the CPG world for vendors. And then, uh, uh, bill left and he founded One Stone. And, you know, you, you've got this, this moving and morphing, but all of it is entrepreneurial.
[01:11:26] Cameron Clark: Mm-hmm.
[01:11:26] Thomas Addington: None of it is big corporate. So you have this very, very unique mix of Yeah.
[01:11:31] Thomas Addington: You got Kellogg's General Mills, they got their signs on the big buildings so everybody can see they're here. And you got Coca-Cola and you got PepsiCo and you've got all these other very recognizable names. And then you have these, this entrepreneurial, very, very vibrant entrepreneurial, um, activity that's going on under the surface.
[01:11:52] Thomas Addington: And maybe every single city in America has that. I don't know. To me it feels unique here, right?
[01:11:57] Cameron Clark: Mm.
[01:11:57] Thomas Addington: It, it feels very special.
[01:11:59] Cameron Clark: Mm. [01:12:00] Wow. And you kind of, you talked about what neck, what's next? And then, and previously you, you alluded this a little bit, but for both of you, how do you define success?
[01:12:13] Allen Befort: Hmm. You want to try that or you want me to?
[01:12:20] Thomas Addington: Well, we can both have an answer. I mean, success for us, FPE, I, I know this is true for us. I dunno if this is what Allen's gonna say, but for us, we, we steward opportunities that God's, that God brings us and we build long lasting relationships and we, our goal is to build a profitable business. So, you know, if you, if you, for me anyway, for Tom coming here and just really enjoying being here because it's life giving.
[01:12:52] Thomas Addington: Why is it life giving? Well. The people are amazing and they like to be here and they're doing [01:13:00] work. Not all of it's glamorous work at all actually, but it's still productive work. It's good work. And they enjoy being here among other people doing that same work. Yep. Um, this is, this is a God story here from start to finish.
[01:13:14] Thomas Addington: Who doesn't wanna be part of a God story if you have a choice? Um, and so relationships, opportunities, profitability, those, that's a triad that I think would answer the question for me.
[01:13:28] Allen Befort: No. And that, that quote, that phrase is what's on the windows on your way in. And I, we had our state of the business with our all, all our staff on Wednesday, and we start with that again.
[01:13:40] Allen Befort: And it's affirming, this is what, this is success for us. Ship dog food ship books, do whatever. Success for us is steward the opportunity that God brought us to build relationships that matter. And really what I talk about our team is, is the innovative and lasting business is fun, but it's a necessary, it's the means part where [01:14:00] so often you hear at least the horror stories of business that uses people to make profit.
[01:14:06] Allen Befort: And I, I don't want to claim to be perfect. I know we're not. There's, there's somebody with story of, uh, giving tos wasn't great for me. I know that exists. But we are at least fighting uphill. We are trying to be counter-cultural. We are trying to flip that on its head. And I, again, I I, we're not perfect at it.
[01:14:24] Allen Befort: But success man, if we can, if we can counter-cultural and flip that and say, you know what, no, no. We use the business, we use a profitable well run business. To get to do relationships and people and impact and, and enjoy working together. I mean, that's that success for me is a little, little bit of a redeeming the work world and saying, what if it was a well run business as a means, let it be the thing that gets used.
[01:14:50] Allen Befort: We use the business to get to do people well, to get to do the people side of things. Well, that would be, that's the assignment I look at. And if I look, you know, [01:15:00] years down the road, if it's like, that's what you did, you ran. So yeah, we had to run a good business. And that's fun. It's fun to get success.
[01:15:05] Allen Befort: It's fun to get the sales call. That's fun too.
[01:15:08] Cameron Clark: Yeah.
[01:15:08] Allen Befort: But man, we're gonna use a well run business to get to do relationships in people. And we, we told the team, I I, I tell 'em this all the time. I said, I said no one would sign up and say, I wanna work. You know, what kind of place do you wanna work at? What kind of place do you want to come to work?
[01:15:22] Allen Befort: Would anybody raise their hand and say, you know what? I hope we go to a place that's backstabbing. We talk about each other. It's got, it's toxic. I don't like what I do. I don't like who I work. Well, no one would ask for that. Yeah. And they'd say, well, I wanna work at a place that's positive, encouraging, fun.
[01:15:36] Allen Befort: You know, we have each other's back, we support each other. We're honest with each other. Everybody would want that. And then I look at everybody and I say, we are they. When it says they do it, we are the ones to develop our culture. Do you want a place that's positive and encouraging? Then guess what? You be positive, encouraging, and you be positive, encouraging, and you be PO Like we are.
[01:15:54] Allen Befort: They, we are the ones, what kind of environment do you wanna work in? And I'm like, that's, that's gold to [01:16:00] me, like to have a great place to work. Like we are the ones that develop that. So it's how we treat each other. It's how we interact. It's, you know, that's the part that's fun for me. And we talk about that.
[01:16:08] Allen Befort: It feels very logical to me. Like, I'm like, this is very vir logical. Do you want a place like this? You wanna work like this? Okay. Who decides? We do, we do every day with the way we treat each other. And so that feels fun. That's success is that relational part. That's what we're shooting for. And if we do that, that's why it's a long term play.
[01:16:24] Allen Befort: Let's do this for a long time.
[01:16:26] Nick Beyer: Yeah,
[01:16:26] Allen Befort: let's have a bunch of employees for a long time. That sounds good. That sounds like a win.
[01:16:31] Nick Beyer: Wow.
[01:16:32] Allen Befort: That's amazing.
[01:16:34] Nick Beyer: Uh, well, one of the things we do at the end of every episode is just kind of highlight what we feel like our listeners will hear, will learn from you both what we learned from you both today.
[01:16:42] Nick Beyer: I think the first word that kind of came to mind, and we, you both used this with the gritty and pretty analogies throughout the, um, whole show was just this word grit and what it really means. Like the business model you chose was gritty from the beginning. Just really tough. It's a tough business model.
[01:16:59] Nick Beyer: It's [01:17:00] capital intensive. It's hard work.
[01:17:02] Allen Befort: Mm-hmm.
[01:17:02] Nick Beyer: Packing orders, shipping them on time, like it's hard work. Um, and I think it, it, that work even translated the, the, the grit that you had translated into cleaning up the business model. And I really liked the way that you gave Allen credit on that. Like him and the team.
[01:17:18] Nick Beyer: Y'all looking at this, the assessment, the diagnosis to say, Hey, we're not healthy, and then you. The grit by you and the team to say like, Hey, we, we have to make this healthy if we wanna last.
[01:17:29] Cameron Clark: Mm-hmm.
[01:17:30] Nick Beyer: Um, and it's, that's tough. It sounds really tough. Um, I think there's a lot that people are gonna learn from that.
[01:17:36] Cameron Clark: Hmm.
[01:17:37] Nick Beyer: The next word that I'd use is creative. We haven't had, I don't, you know, even the business model itself in the author space with creators like that is what y'all are living. Mm-hmm. And so you have to be creative by nature to enjoy that work. And so I think that that's been really cool. And I think a lot of people will learn from that.
[01:17:56] Nick Beyer: But I think the, the way that, um, [01:18:00] that really stuck out to me was when you started a walk through the business model and the enterprise model that I'd say has really developed, it sounds like, within the last few years. Mm-hmm. And it obviously took a lot of pain and a lot of struggling to get there. But now you can look back so clearly and you're like.
[01:18:17] Nick Beyer: I mean, I know you weren't being arrogant when you said this, but there's, it's hard to compete with that suite of services. You can compete against one of them, but it's hard to compete against a suite of them.
[01:18:27] Cameron Clark: Right.
[01:18:28] Nick Beyer: And, uh, I think that takes some real creativity, um, from both of you, from the team. And so hats off on that perspective.
[01:18:35] Nick Beyer: I think a lot of people can learn from that, integrating that into their business. And then I think the last one would just be opportunistic. Um, watching the way that you guys have built your staff, even just kind of knowing your story from afar from a while. There are amazing people who just, when the opportunity came and, and you guys could hire them, you did.
[01:18:52] Nick Beyer: And they're in integral piece of the cultural, the culture here at Giving's. Um, the same way for the business model. It's [01:19:00] all been opportunistic. I think one of the core veins that we've seen through the 30 something founders we've interviewed now. Is seeing a need, meeting a need, and that has just been that, that word opportunistic would mm-hmm.
[01:19:12] Nick Beyer: Really capture what y'all have done over the course of, you know, 15 ish years. So, um, thank you guys. Thanks for the way that you guys shared your time with us today, and we learned a lot from you. And we know our listeners will too.
[01:19:25] Thomas Addington: You honor us by asking the questions. Yeah. Thank you.
[01:19:29] Nick Beyer: Absolutely.
[01:19:29] Cameron Clark: Thank you all.
[01:19:30] Nick Beyer: Thanks guys.
[01:19:30] Thomas Addington: Mm-hmm.