Billionaire Entrepreneur Tells The Ugly Side of Running a Business

any great creative person is never happy if they're happy they're the wrong creative Persaud the minute a creative person has created something they're unhappy with it do you think it's almost mathematically impossible for a founder of a company to be happy with any CEO in a public board the number one job that they have is to have a great CEO they're number two job is to have a pipelining for that CEO what I'm really looking for is I'm looking for leaders that can create other leaders I couldn't prove the future and it's so easy for metric people to prove the past I also fully believe in the 3d printing of food and and I think everybody's going to be fit 20 years from now what's really gonna have are we gonna have like smart clothes like is there gonna be smart technical athletic gear or were we going so today we're sitting with an entrepreneur but for some of you guys that want to know maybe well let me see what the data the stats are chip Wilson founder of Lululemon pants which now is not just pants they went from being a small business to not being a twelve billion dollar business give or take the men sitting to my left your right got a net worth of roughly 3.8 billion but who's counting and a one number I'm so curious about getting to know about him he's got a new book I will talk about here in a minute so when they started Lululemon they were one person one percent of their customers were men they went from 1% in 1998 to 30% in 2018 how do you do that I'm so curious to find out more about how the CEO and founder chip Wilson did it so with that being said sorry Patrick it's great to be with you thanks for today cool for some of you that don't know when chip and I were talking for a few weeks about wanting to do this interview we were thinking about doing in our speedos today but we thought it was inappropriate maybe you'd be uncomfortable and that is an inside joke because one thing about chips work environment is if he had it his way why don't you tell the rest of us if you had it your way what would you were three pieces of you know maybe Armani suit or what would it look like I mean I guess from living a lifetime as a competitive swimmer you know when I was young it's funny how I'm 63 years old and still defined myself as a competitive swimmer but you know living that life and it speedo was you know just the most comfortable thing ever and I and I think the cold water and swimming always kind of cooled me down so when I actually went to put clothes on it was exceedingly uncomfortable and I felt I was always sweating so the speedo felt where when our life really happened for me so how wild is that you like to have the least amount of clothes on but your business is to put clothes on people right that's that's a pretty interesting dynamic yeah but it was the context of knowing that that's how clothes all clothing should fit like you should be naked you shouldn't ever think about your clothing I like that especially in athletics you want to win that event you shouldn't have to think about what you're wearing so is that like a are you thinking about coming up with a new league like new competitive sports type of thing is that a next project after Lululemon or is that just an idea no that's just the design concept so New York Times don't write about it and say he said he's gonna do something like that so look let's get into it and before talking business one of the things I'm always curious about is a person like you you've made it to the top everybody's looking at you saying well one day I'd love to have a story like yours we have a lot of young entrepreneurs who follow value Tim a lot of executives and people that are on business or somewhere around you know a million at the low revenue upwards of 100 million dollars per year and they want to find out how to scale their business but prior to going there your personality is very different than Mark Cuban's personality but your net worth is slightly more than his this is not a dynamic you're loud you're this you're very subtle very calm very your temperament is an interesting temperament that you have if I was in high school with you we're in 10th grade right we're best friends we hang out together whose chip chip would have been an athlete the competitive swimmer who really would like to play football but almost too good a competitive swimmer to quit to play football recognizing I'm getting too big to swim so in other words I can do that I can only do Sprint's I can't do long distance I'm a mediocre student but I live for athletics so the it seems like the only reason I'm going to school is phys ed for you at that yeah yeah okay my dad was one of those original hippies you know the organic food and the self development Wow you know living in the Esalen Institute in California during the ass here in the 70s and so I was a little bit of a function of that in the inquiry about it but definitely thought my dad was very weird at the time and and now of course I see almost everything he told me actually he's come to fruition and life actually is about good food and knowing yourself in that amazing yeah so now you have a hippie as a dad but you're extremely competitive how does that happen what what caused that was it just your DNA or was your house a house of let's play Monopoly and see who wins let's play cards and see yeah let's play backgammon and see who wins where did that competitive fire come to chip or was it just part of your DNA yeah I think is part of DNA it doesn't mean it has to be there forever in life you know I actually think Lululemon was built on not competitive actually for everyone winning which was far different than the other athletic companies so it took me 40 years to get to that point and you know for me to win everyone has to win for you to win everyone has to win yeah so the the will you ever an extremely super competitive guy that maybe you push some people away from you or there was never that part of you was just an internal composed type of a competitor no I definitely I wanted to win I mean there was that I think it's the testosterone as a kid but as a child but I think there's a time when you realize okay well I have a choice I can compete to win or I can that's a good question why did I change I change because winning only got me a win a small wins but actually being inclusive and bringing everyone in I started to see that could bring me a bigger win so to you competitiveness does it mean that you're a solo competitor I know you were swimmer but are you somebody that also follows team sports not anymore I'm only because I don't like the whole drugs and the the media excitement about it seems like that my love of the pure sport has gone which is probably why I love rugby more than anything else right now the rugby sevens I think that are being played in Hong Kong and Vancouver around its that English gentlemanly sport where you kind of give it all and you can like crack a guy's head but he's still your best friend was there a tipping point where that shift was made on your mind or no like like for instance when Lululemon first got started was the chippy side of you still there because I mean your manifesto when you wrote it that sounds like a pretty competitive guys manifesto you said one day we would like to make Pepsi and coca-cola with cigarettes is today great marketing I think it's a terrible product something like that yeah Coke and Pepsi are the tobacco of the future great marketing terrible product but really where is coming from as I felt like I didn't care so much about making money but I Lululemon it was a platform of social health I see what you're saying I totally feel that by the way well I totally feel that you know how you get an athlete that lasts a long time in the league and and you kind of said well look at the perfect LeBron James he's got the great body but this guy's got the discipline to condition himself and he gets along with people etc etc but you come across like a guy extremely capable he pays attention to numbers creative but at the same time people actually like working with this guy you got a chip beside there you don't mind having a tough conversation well you're still somebody that's you're likable enough where people say I want to work where I want to be around a guy like this so very it you could be called an anomaly to some people as a seal but that's a whole different conversation we could have so okay so you're an athlete you know you come out I think you started a couple other businesses before Lululemon actually happened what was it you were doing prior to Lululemon we were led to just you know saying well I'm we when we start a new business called Lululemon well I fell into the surf business by mistake I was living in Canada no competition Quicksilver and Billabong had just come from Australia in the California Opie was here it was just that the fledgling start of that my mom was a sore I was a big guy clothing was very tight at that time very uncomfortable I kind of took the concept to Canada and because I was such a big guy I started making and there was no real lycra at the time that I knew of outside of speedos that I I started making larger longer shorts for men I went into that business and then as that became a commodity business neither was doing from 0 to 500 companies to much product toph to few consumers then I morphed into skateboarding same thing happened and morphed into snowboarding then when that became a quantity product I was just in the right place at the right time sell to a public company got some money could sit back and call now what and and that's when you said let's try to do Lululemon yeah and I dolls had this thing where ice if I saw three things in a very short amount of time I knew it was something that was going to happen hundred percent so I kind of walked by a telephone post and there was a little sign there for a yoga class which I'd never seen before I'm in a coffee shop and I hear two women talk about a healer class and I go and read the newspaper and there's an article about yoga and I went this is going to happen it says on the type person that looks for that kind of thing my success seems to have been like just being five to seven years ahead of the normal consumer trend what did a name come from by the way yeah when I had West Beach which was my former West Beach snowboard I had a skateboard brand I had called homeless homeless homeless yeah so I was I was making it I was selling to Europe in Japan and and then I went to register the brand cuz I woke a this is actually gonna go but I couldn't register homeless because hom is French for male and there were it was would have been impossible to trademarks snowboarding was going straight up and skateboarding was like I said becoming a commodity product so I went I'm not gonna do homeless anymore I'm not gonna do it so I told everybody and that year I was over in Japan and I showing them the snowboard line and after I do it they turned to me and they go mr. chips and we're homeless I said I told you guys I'm not doing it and and I told him the reasons why again and next year the same thing show them the snowboard line mr. chips and we're homeless told me the same thing and you got to get at that time it was kind of like the Japanese yen was the highest ever they were buying all of America Pebble Beach the would yours is 97 9 yeah 95 94 94 6 something in there so they phoned me up a couple months later and they said mr. chips an we want to buy name homeless from you and I went and so I that I'm selling complete air because I'm not making it anymore I don't own the trademarks to it and I'm desperate for money so so I gave them a price I thought was absolutely ridiculous they said yes and I went oh you know that's easiest money I ever made so I thought well why did they like that name so much and I went oh you know like the job there's big five big Japanese trading firms and they are all starting to make clothing with American sounding names but I think for the twenty year old or the young teenager they knew that it was more an authentic North American name if it had an L in it because the L doesn't exist in the Japanese language I started to think of alliterations and I went this time if I ever have another company I'm gonna put three L's in it and if I consulted Japanese I'll get three times as much of course it was all in my subconscious I think so then what did you put together my how did Loulou come and just just I don't know one day in it it's especially with the word lemon at that time because it was very well connected to Detroit poor quality right there of course so actually it was maybe just on the precipice of that being a name which could be used again and putting Lula and lemon together seemed to be like a super fresh name so it's like a formula you literally were looking for a name with three L's in it right Lululemon like when you started it did you think it was gonna turn into what it is today was there a vision that this is something everybody needs to use because I had seen what had happened the surf skate snowboard industry when I caught into it and how quickly it grew my first yoga class was those six people and and within a month it was 30 people that was faster than I'd seen in the surf skate snowboard business but I had no idea it would be as big as it was but I knew I was in it first I knew I had a new business model of eliminating the wholesale person in the middle and I knew I was probably one of the only people in the world that was really thinking of technical clothing outside of Mountain gear because that come from the snowboard industry and now you know to think of like being in the gym and actually thinking about that in the same kind of form as as mountain survival clothing was an interesting context you seemed very methodical have you read the book blue ocean strategy yes but Blanc a long time ago I read a hundred books a year so I it gets lost in in what one what the information comes from what it almost sounds like that's what you did you had a blue ocean I mean it almost seems like we you you came out and you know you had a blue ocean but who came after you that's would you say would you put as a competitor of Lululemon well I probably the closest that came was Athleta they started off an online and then the gap bought them yeah I'd say that's as close as it came of course everyone's put more into and you know created an aura of competition around Lululemon which leg Lululemon definitely had the chance to move out of that mm-hmm I mean you know we were seven years ahead of anybody and then you know we had the chance in poly 210 to really own the whole space of mindfulness the same way that Lululemon did for yoga but you know a company gets big you get people that don't want to change I'd kind of lost my voting power on the board to be able to go no this is the future I couldn't prove the future and it's so easy for metric people to prove the past so and they get very nervous about investing in the future especially if there's if they're a public company and they're really concerned with quarterly results and so what why don't we transition with that because I know you mentioned a gap your new book called little black stretchy pants the cover is an incredible cover you have this hole and by the way I mean how you talk about you know the fact that when you made these pants one of the things about the woman is the fact that they're uncomfortable when they wear their pants that you know they're just worried that yoga but they don't want to wear in the streets because athleisure there's a different word the whole camel toe goes away and you were thinking about designing it in a way where people get comfortable and they go in the streets and sport it but you know when you're talking about some of the creativity that goes away in the business would you say some of that was when you brought in Christine day because in the book you talked about Christine day the existing CEO at the time that you had a bit of a direct conversation with can you walk me a little bit through what happened there we were a company that when I had three kids under the age of two when I kind of decided I was kind of like I mean kids any age who yes so it was kind of like blue was a cash cow didn't need money but I needed advice and I wanted to you know to transition and my job as an entrepreneur I thought from the book the e-myth was always to move myself out of technical like no no move myself out of day-to-day operations and get above so I could like be that seven years in the future christine day was a great sea you know CEO for the first couple of years but then it would became obvious to me that there's a real difference between what a CEO is and what a chief operating officer is the CEO has to keep the culture in the vision I think that's their number one job to me the CEO o is somebody who runs the company and runs the operation then metrics so what became clear to me after after a while was that I had an operator metrics CEO so there's an obvious clash because I'm looking for things seven years in the future in position the company seven years in the future and a metric CEO will want to be you know provide the numbers for Wall Street that quarter when that happens and there bonused that way then they're going to operate in a short-term fashion and the easiest way to do that especially with a great brand like Lululemon you just lower the expenses in other words the number the green not let the great kind of people you have you had a great level of quality you have really easy to cut down for a couple years raise the prices it looks like the seals a genius when I look at it and I go those are called bad profits in the long run that's gonna kill you which is except exactly what happened at Lululemon so so let me ask you so CEO and CEO role of a CEO is purely operational on a daily basis to you so what is the role of a CMO I know it's marketing but is it pretty specific to you on how you gauge because you seem like you're pretty meticulous on what you expect from each role and define each role what do you look at a CMO or a president is the president different Dennis iam actually curious to know what you think about that well I think a lot of these when you're talking about president CEO CEO a lot of those are like indicating that that person's next in I don't know where president fits in because I've never really had a president I've had the CEO but if you put someone CEO oh it's really like saying okay if if the CEO got hit by a bus the CEO is in there and it's a it's an indication to the public market that you've got somebody ready and in place ready you know to step into that position because the in a public board the number one job that they have is to have a great CEO they're number two job is to have a pipeline for that CEO Wow so no one who's gonna replace them sure and what is that typical timeline is there a set timeline or not necessarily well it really depends on who your CEO is I mean in most cases a CEO will last like four to five years so and it's really on my belief that the CEO all CEOs number one job from the book good to great a number five liter is developed someone who's better than and under them such that whenever they leave actually the company runs better that's to me as a level five CEO let me ask you we did Christine they follow you as a CEO is that one you stepped down as a chairman and CEO and then she came or had you already had other CEOs after you before bringing Christine day in yeah I was CEO and then when we went public I became chairman and we hired a CEO who worked for Reebok Bob mares was his name and he did a great job helping us with our production because that was probably our bald neck at the time he was still an East Coast kind of executive and wasn't quite right for us but he was kind of a what I'd call a pretty face for going public in other words they're saying the people that are going that are investing when you go public they've got a thousand companies to look at so they want to know that there's somebody in there that's kind of done it before or kind of been in a public company kind of understands it it's kind of like they need a babysitter or some it's part of their due diligence do you think it's almost mathematically impossible for a founder of a company to be happy with any CEO he or she hires because as a founder you're the heartbeat right and so to you everything is like do you know what we've put into this do you know what this logo means do you know what the stories behind the system do you know behind the culture of this do you know why we look at vision first do you think it's difficult for a founder and a visionary like yourself to have anybody that follows you and say I'm happy with the seal well I think specifically if the visionary founder got more of a creative mind like I do any great creative person is never happy if they're happy they're the wrong creative personality the minute a creative person has created something they're unhappy with it I mean really you know and they should be so the my job then is to like if okay great I'm a creative person and I'm so I'm an analytical creative person so my job then is to surround myself with structural social people so in any kind of dynamics there has to be that balance so if I'm that as I knew I was a you know visionary creative analytical person then my needed my CEO to be the very office at which which in in almost all cases they have been and I think that that system worked out beautiful until it didn't I mean the the real story about that is that I lost my control of the board and I think for anybody going to get private equity and then to go public right when you go to get Google with private equity you've got to know what your board of directors and the governance is gonna look like when your public not when you're just taking on private equity money because that's where really all the power lays is when the entrepreneur first sells their company so I didn't do that it's my fault you know I I have I lost control of the board that when you sold 48% of the steaks is that what you're saying that event was kind of how he exchanged yeah which was great it was long at all that aw that was all per right but I just didn't see the long-term ramifications of not being digging in and finding out what the governance structure was gonna be when we went public naturally when you go public and this is like really really fascinating you end up Ida had no idea that we needed more board of directors than we already had you know I get told like a month before I'm a very in the depth creative person so it's not like I've gone out and have been to harbor of heaven that Kannamma scree but that didn't mean I knew somebody that could be on the public board of directors in the United States Board of Directors my board that I had elected more people because you've got to have three people on the governance three people on the audit and three people on the the Compensation Committee just the nature of who wants to be on a board the mindset of that person is not necessarily a creative person in other words almost the the way the boards are set up kills a creative person it's very metric driven it's very by-the-book the litigation system in the United States is phenomenal so everything nothing can kind of get documented everything can kind of get talked about there's no real love or caring about the non metrics of innovation culture brand because you can never get sued for it so the Board of Directors doesn't really care a creative founder who's that's their that's what they really bring to the morning directors loses their power because what they say is one versus almost eight other people when that happened to hat what did you do you know when a creative person loses the ability to keep being creative because you're being driven by logical people how did you handle that I didn't really know what was happening I felt like like we had these directors that were coming to our company because they went man Lululemon is like creating the number one metrics in the world in apparel I mean it was off the charts and I thought that they would want to come to the come be to learn why that was because directors don't to a great extent don't really need the job most of them are quite wealthy and they're trying to give back and I really honor that after a while that that kind of gets lost non creative people can't handle the unknown that creative people bring into the process I always believe in this thing the law of attraction and I think that they want more people like them or surrounded them in the board like them not like you yeah right and I also want a CEO like that because they know how to talk to that CEO do you think it's almost like company starts you are the most important person in a company because you're the creative visionary found the right and as a company starts going past the maturity phase it's almost like the board of directors the directors the money people want to get rid of you because you're almost getting in the way of them increasing the data they expect or so they can make the most on their money and return do you think it's almost like you're getting in the way as a creative founder do you think they look at it that way I think they do I think they're but they don't know that they think that way that's the interesting it's a very subconscious thing but I know they're smart people and I know they've been in big businesses and I know that they you know that whatever business they were in they knew that there had to be a right balance between creative and analytic or metric and you know a metric over here yep safety security don't rock the boat be careful versus you know the the creative person who's out on this end so you've got to have both these and it's a teeter-totter and you gotta balance sometimes it goes up and down up and down interesting so said then I have a follow-up question for someone like you say say I'm your protege I look up to you and you've chosen to mentor me for no reason just to want to mentor me right and I'm coming to you and I'm speaking to you and you say Pat you're a little too competitive and like but you understand shape you know we're gonna build that everybody needs to have this this is just amazing but Pat I'm just telling you're a little too competitive your edges too much your edges too this right so for me I'll come and say well chip where were you when you were my age right what were you thinking about when you were my age and then you're gonna come back and say but you don't understand Pat it's too much or you gonna drive people away by being this competitive so do you think it's almost similar like when I asked and I said how competitive are you I'm very competitive it I had to learn how to collaborate and bring people together and rather making it about the team do you think this is a very common trend that happens I have my own board and my board these are people that have made money these are people that have done fairly well for themselves so they're not coming in because they're just an advisory board and uncle that makes 600 grand that's doing you a favor these are pee that I made 200 million 100 million 50 million they've done well for themselves so they look at it as an x-factor right do you think the longer you're in business it becomes more logical and the emotional side goes away would you say there was an element of paranoia with you or no you were pretty free-spirited let's trust everybody good eyes definitely trust everybody I think Wow give before expectation and return I think if I had somebody who is that competitive I would probably let them go or I would coach them what I'm really looking for is I'm looking for leaders that can create other leaders of course so in other words if people aren't gonna look up to that competitive shut it and go that's somebody I can learn from and that I can move to the next level from and where everyone's inclusive and everyone wins in it then then it probably wouldn't be the right culture for Lululemon got it and that's one of the reasons why when you had a chance to but maybe it is I don't know maybe you can correct me with this where you almost you were twice the size of a price point of a Under Armour and you sat with a plank I believe and you guys talked about doing a deal together but you said the company was a little too over the edge I don't know what word you use but yeah and that all gets overblown I didn't ever talk to Kevin Plank okay that's what the article was written that you sat down and he spoke to him whatever if that was an article that was a media person creating a story in order to sell sensationalism in order to sell marketing clicks in order to pay their mortgage and their kids let's to be clear on that no the only statement I made is that you know I went you know in my own mind I went down we talked and I went well wouldn't it be neat if we could put this great men's coming together with this great woman's clear you actually saw it obvious I mean Nike was the big the big not you know we were both good at opposite ends of that so it made sense to like think about it it would be stupid of me not to like contemplate that that would be a good move but this that the cultures were just too diverse one ultra male win at all costs and Lululemon was everyone wins it almost sounds like because I know in the book you talk a lot about the fact that there's three different types of women and one is a super woman the other one is a balance woman and and power power woman can you can you talk a little bit about on that because I mean you Thomas September 28 32 years old that's very specific you know it's sort of target mark or a target market you got very specific on who was the ideal target market for you and it's detailed owns a cat it's thinking about possibly getting married but not yet its athletic takes care of her body you were that detailed about who your customer was that's incredible I believe as a to start a company you've got to know the real subconscious of the customer that's buying it and for me that 32 year old was our iconic like that was our I don't Tiger Woods leave on James whatever you want it to be we didn't have to go out and buy you know buy you know big money sponsorship artists was just to make sure that that 32 year old loved everything that we did it's interesting because everything we do is segment it every time we go on the computer anything we say it's all segments and so in branding then I had to figure out well who is our customer and so then that's when I came up with just like I'm sorry just like Gen X Gen Y you know that type of thing I came up with superwoman was a certain age a certain mindset and that was the mother of these super girls that were these highly educated daughters of these power woman they created a whole new world that had never existed before and that was a really a 24 to 32 year old woman that was highly educated professional with no children owned a condo and very fit traveled the world because before that age in 1998 you know you could say all women got you know had babies at 24 and left the workforce so it was a major shift in the way the world occurred and I was putting language to what I saw in reality so did you like I want to know the process because for me I'm in the financial industry so who's your ideal client 27 to 35 married with kids you know ambitious certain Drive that they have we have certain things that we look at but for you what was your processing of coming up with who will be the perfect ideal candidate for you was it research was it you sitting out and thinking about did you collaborate with other people on your board or your home office or your marketing team how did you come out come up with that number in Africa I know so much charity money was moving in there because the goal was to educate woman because everyone knew of a better educated woman will wait longer to have children and have fewer children so when I woke up one day and I saw something in the paper that said 60% of the graduates at a university or woman like in 1998 I knew there was a massive change in the world and maybe I was the first person to see it where really I think that was the inflection point for woman being more powerful than men but it's 20 years ago then you gotta gotta go okay if these girls are now 22 years old what are they gonna grow into like what's gonna happen well they are they are gonna have condos they are gonna be well-dressed they're gonna have money twenty eight year old woman before that didn't have any money because they had two kids and their husband was out working and they were struggling on a mortgage and there was nothing there but the minute that these women are still single and they're still just growing their career and rather than leaving the workforce at 24 and now they're 28 30 32 making not this like thirty thousand year but 80 90 hundred thousand there's a lot of disposable income there so then I went okay I knew yoga was coming I knew there was a lot of other things kind of put in place and I knew that there was now the ability to buy a very very high quality athletic product that had never been made before so that that was your process and on how you came out with it so do you have a system on how you make decisions like in your mind is there a system that you have on how you make any kind of a decision I know one of my my biggest issues and other people may be other entrepreneurs will find this is again being a creative person being five to seven years in the future almost everything I think is going to happen is it's almost like a feeling because it's a million touch points not any one specific thing and I say that you know six percent of women out of university were graduates but that was like that took me over the edge of probably a thousand different touch points so that gal I had internally but I didn't know how to express expressing you know like a color to a blind person is like very difficult and it's the same kind of thing and my creative creative people inside a company have to be protected because sometimes they're wrong and when they're go wrong then the metric people just love to go oh I knew you'd be wrong of course I'm gonna be wrong every now and again but that gives me the ability to jump in take control put parameters around the creative person and the creativity never comes back and I'd say this is the biggest downfall of American public companies interesting not knowing how to nurture the creative minds and allowing data to crush the creatives machine of coming up with the next ideas that is that kind of what you're saying right my statement would be you have to have a seal that understands creative so well that they can protect creative from the metric finance machine that is usually they're usually better spoken they're usually better educated they can prove their data because they have metrics from the past where when the Mets won the creative person does something wrong are you know it doesn't work out they can then they have to start proving the future and if you have eight of nine people on your board of directors and you're sitting there they're gonna go yeah we'll go with this person that can prove so you would say somebody like you is living in a future truth sure sure honey use a trigger so you're the future truth gal you're sure sure unbelievable that's a that's an interesting we have so so what do you do with that is it kind of like a politics where it's like Democrats and Republicans they both kind of need each other to keep it balanced or do you kind of have to separate create a fully formal logic and don't let them clash because if you're a creative founder you have no choice but to sit in that boardroom when you're a chairman of the board and not allowed these guys to tell you what what happened last quarter well what's going on based on your numbers you did three quarters ago or two years ago it looks like this is what's gonna happen what do you do to make sure you don't have your creative guys heart be broken at least you know their ideas be broken both sides have to appreciate each other and I the great analogy is just getting married man men and women are not supposed to be alike on any kind of level they I mean there's some crossover but they have an end vision and an end goal and in my mind that's all was we want to raise great children that are productive in the world and that we love and they we love them right we want to be great grandparents that's the end goal so you have these two people that almost can look at life entirely different ways and even within that you can have one metric and one creative person you can have one one nurse one engineer do you know what I mean it's all over the place but these people because they have a common end goal they know they need each other to get there and it's a synergy thing one plus one equals three but if you just have a metric board then it's one just have a bunch of creative people it's just one I mean that has to that that's the big opening I'm trying to really well one of ten big old things I'm trying to say in my book so you know one of the questions I asked the earlier that I'd like to bring up is you know so many times a company has a certain direction they've gone product wise hypothetically like maybe you know some companies say we're gonna go low-income we're gonna go middle America we're gonna go upper-class we're gonna go affluent because we're Goldman Sachs and you have to come up with a minimum of 10 million and then you change a philosophy right you went from 1% men 99% woman now you're 30% men 70% women that's not an easy thing to do what how did you guys make that big of a transition from 1 to 30 well actually I think it's not good enough I think it's actually one of the big feelings of Lululemon and in a missed opportunity I would call it definitely when we started off in yoga there was most men were quite slight if I can put it that way and what I'm not effeminate but slight because they were in such a good shape but they were usually on the small end of things and really in hot yoga at that time all you wore I mean really a lot of the men that came were actually did wear speedos and then we started making you know kind of short kind of shorts but it wasn't like men needed a lot of clothing and was so that was the genesis of where we came from and then woman just because nobody else was doing woman's beautiful athletic clothing that was technical we really the market was so big we couldn't really like build on the men's that much of course I come from men's surf skate snowboarding business that was the whole thing so I was quite cognizant that the future was there and there was a time to do it probably around 2008 you could start to see the inflection point where all these women were looking so good coming into the gym and men like kind of had to step up the plate you know it was kind of like wow I can't really like this baggy holy like gray styles I haven't washed in three weeks like no you know like I got a you know this and I think people stopped going to bars at that time they stopped drinking they stopped you know there I mean it is a general what your did you say this is coming from a study that's oh wait mm anything had to do with the drop of the market or not at all that had none got it you know actually I there one thing about that as I think that instead of people doing gambling and drinking and smoking they actually moved to athletics even more as a coping mechanism so the market crash in essence what you're thinking I don't know what data you have I'd be curious to know more the market crash made us healthier yeah I mean or we went to a different form of coping with it so around that time then you we could I could easily see that the men's market was never gonna be as big as a woman's market because women just have more clothing they've got more pieces to cover up yeah the bottom line that is a good point and they're colder and so they you know they think much differently but well some men would want the less pieces to be covered up right but that's a completely different market yeah I mean like Paul right just sitting behind the camera but please go ahead I'm sorry so um so then there was an inflection time though that was time to like set the base for for men's and at the time we were just coming out of being constrained by a retail store I mean ecommerce was just eking out in 2005 670 know what I mean and it was mostly a commodity product it was like sinb old sword Kleenex or something like that not something that was tactile you could hold you know that you needed to fit and all that type of stuff so we were just kind of moving into that era but it was easy to see that you know because we couldn't make like 50% of our store 40% of our storm ends but ecommerce was gonna allow that platform to happen all we had to do was show it in our stores and allow the freedom and the breathability for men to go online and start and start buying it and we could have been 10 years ahead of Nike or Under Armour as anybody else because nobody else was was doing the vertical model missing the middleman we had the opportunity to make much much better quality product at a much better price which we did mostly until we you know got you know quarterly reports you know from the wall street going back logical it's like it's painful so let me ask you I see a Lululemon store in the mall and I'll generally just look at it and I'll say one nice stuff and I'll walk away in my mind my wife she'll stop by Lululemon and goes inside and I sell see you I'm going to go to Nike or something like that you are a big guy I'm a big guy you just said earlier that some of the customers that were coming into one a wear Lululemon they were smaller like I'm in Argentina last week and I'm in Italy the month before and I go to stores to buy clothes I'm like I need a sports jacket sir I'm sorry man we're not gonna find any sports jacket your size in Argentina or in Italy because what it is you know their market is a different market do you wear Lululemon today yourself are the products built for somebody like you to wear Lululemon yeah it had to work for me so ok so you go super limit 100% ok but I are really reducing at the beginning of like 1998 to 2002 the yogi men were quite small and slight right so so but that morph to really quickly and and what I'm saying is really we just Lula manned just had to make masculine stuff but it made the mistake of it kept hiring fashion designers from I'd call the east coast of the US who didn't have the content like the West Coast makes things functional and then makes them beautiful where the East Coast makes the beautiful and then makes a fun price to make them look out like that's it's a whole different distinct interesting interesting so this means now next time I walk past Lululemon I have to go inside that's what you're saying after going see if I can find something because these ripped jeans I mean you just call that my ripped jeans you're like these guys are wearing ripped clothes you know going out Paul we got to stop by Lululemon and find some tights for you well I don't think actually people even wear jeans anymore like I think it's it's we've killed it in the woman woman's business and you see VF Corporation trying to sell their jeans business begin nobody wants to buy that well the apparel business itself is so competitive because how fast things change and if you don't change with the time just it's not a thing that one thing lasts a long time so you have to always be adapting constantly would you agree with that or no I think that's that's two different businesses again that's the fashion of Zara hmm that's what I'm talking about that's I you know it's like we're on the end of like technical like like technical advances occur every year and and again we're I'm you know I think the future of athletic apparel I look I look at people in the Olympics and I go that is the most functional apparel there is you know it's total like rat it's tight under the armpits it's tight in the garage I mean once you've been in something like that everything else feels uncomfortable even but you know our don't only our social norms in North America that tells us it's not if you go into Europe you see men for years have been wearing you know like RIT and running you know for you know wear speedos they don't have any problem like you know like you well you know I mean maybe you know for your Iranian it's they're like they don't even have the context that you know that they have from this kind of religious social moral thing in North America so what is the future though I mean you know you talked to you on Moscone llamas talks about the future on where we're going towards and what he thinks is gonna happen and you you are 5-7 years ahead what's really gonna have our we're gonna have like smart clothes like is it gonna be smart technical app you know athletic gear or were we going yeah I don't believe in all the wires and not slow being you see now I think it it's making clothing very uncomfortable it's heavy it's it's it's kind of get that kind of defeats the purpose of kind of wearing clothing that feels naked I do feel it's gonna be like room I think it's gonna give me a complete suit top to bottom it's gonna say actual fabric will be temperature control it will handle stink I think you can see you know the Apple watch getting bigger but I think it's gonna be a full Apple watch here with your implants here I think the the phone or whatever we call it will do will prick into our skin for blood and moisture and salt they will it will compare that against big data it will send that to you know our doctors only when we are you know what I mean actually the big data just well well tell us you know whether we need to check in with a doctor or not but I also think you know from a fashion point of view there's going to be a people won't be designing clothing so much as they'll be designing apps and you'll go on an app and kind of pick out a design that you want you're going to turn to handy so buy clothes I think we're going dude that's amazing yeah hundred one hundred percent we have to go there we have to go there well if you look over like a period of time when people dressed in England when it was cold and no one was athletic and nobody sweat and and you know it was like all the clothing and the jackets and everything the wall and everything and you look from that time till now and you look at how how much technical clothing has influenced general clothing and you go at another 20 years I mean we're not that far from it so you think people gonna be receptive to the whole ship going into the body yeah I think it'll just be a prick I think it'll be so it's they're gonna track me like where I'm at is it gonna be like a tracking system to them and that's your phone that's a different thing than I think what I'm talking about about health and fitness and I also fully believe in the 3d printing of food and and I think everybody's going to be fit 20 years from now I don't think that I don't think there's going to be any such thing as people that are overweight or have issues really yeah really yeah that you know just so maybe because for us Fitbit like I look at this year right we had everybody at our home office all of us on put fit next thing no people are losing 10 pounds in a month 15 months in a month one of the things I talk about in our company is the fact that visionaries speak a language that very few people speak right and some companies instill a certain culture that you can't teach that language to somebody you can't just come to the Home Office or the company or certain culture and speak that right off the bat it's like you and I deciding to go to you know Portugal and speaking Portuguese if we don't know it we're now gonna be able to speak that language did you have a certain language that you spoke as a visionary and a founder yourself and if you did what was it and whatever it was how did you transfer it to me as when your employees your team members again I've read probably a thousand books in the year in 1997 and out of those I'm sorry hundred books out of the hundred books there were five things that kind of happened that I went oh these are kind of encompass all the other 95 and so one of them was good to great by Collins the goal by Rosenblatt a psychology of achievement it's a it's an audio by Brian Tracy good book great book yeah really we've had Brian Tracy before yes and the Landmark Forum which for me you went to the line Locke well yes sure sure and I phenomenal from learning like the definition of integrity why I complain how I communicate how I create they're really transformational with those you know five things it was like oh and seven Habits Highly Effective People we created like about thirty terms and definitions from those and that's what we that's what you used to communicate in the company so by wind dates conditions of satisfaction you know what is you know you can complain twice but then you have to take action what is action every one we did had one definition of integrity because there's actually a pretty funny thing everyone thinks they have integrity but everyone has a different definition of and that's right so for that so there's no integrity so I think a company has to define integrity and for Lou Lemon it was doing what we say we were going to do when we say we will do it in how was it it was expected to be done and if we can't get it done then we have to go back and tell everyone immediately and and fix fix the issue that we so did you constantly talk about this over and over and over again and your staff meetings employees where's this stuff all over the place yeah it well I documented it and you know but of course when you bring in new executives from the outside they have their own like yeah yeah yeah I got your culture yeah yeah yeah and they're really good at interviews and they're going yeah we yeah we believe what you're saying but they don't really do it and I do it early wasn't aware of that kind of thing at the time our meetings started to show up five minutes late then ten minutes late twenty people would be waiting and we never did that before meetings almost started directly on time where you'd almost be fired because if a creative meeting starts five minutes late then the people in the meeting think oh I can get production can come in fly it you know like five days late if it's missing you miss five to ten days of a winter season then you miss those days to sell so then you got to put stuff on discount yeah then your margins drop then your sales staff doesn't want to be you know your quality sales staff doesn't want to be with the company that discounts so they leave so then you get you know I'd say a lower quality of people and then they have higher turnover so then your training costs are more then your you know the whole it's just a spiral down so integrity it's a mountain that can never be you know you can never get to the top of it but you got to have a standard will you fire fast type of a leader or know if you notice somebody doesn't fit the culture where you fire faster you get people you know two three four chances yeah I think I would be an opening for a person changing for sure but at a certain point it has to be know this person is wrong so get it right before you hire them even so you know it's not gonna fit or cuz you know how many times you hire somebody just doesn't fit culturally I've made that mistake I mean I made that mistake with my board of directors and I hate you know with who we brought in and and I made that mistake with you know a CEO but you know that CEO worked great for a couple years and that's not so but you're right firing fast the minute that you know I kind of caught her in a couple of like lies then okay that doesn't matter about anything else she's lying about a thousand other things in the company and it's bad for the culture it's bad for the future the company we have to get rid of that person now so lies compromised loose hips you had with it it's that's a that's a terms for termination right there yeah and I think that that because that never stopped and the Board of Directors never got rid of that person with the lies then then that then it becomes okay to lie in the company and that why never stop perpetuating and the board even up until the AGM unbelievable let me ask you do you have all of this stuff from the five books in 1997 that impacted the Landmark Forum the Stefan Stephen Covey and psychology do you have that on a PDF which you would give to you guys or no is that available is that something that's um if it's not in the book it's you can go to my website that's kind of an appendix to the book and you can find that at the linguist it's called the linguistic abstractions so the terms and definitions perfect so this is what we're gonna do this is what we're gonna do just for that part we are gonna leave that link below as well for what he talked about in 1997 let's make sure to do that as far as the book goes to finish it up one if you could speak a little bit about the book what could you say about this book here well it's a book about incredible people a good culture that was really based on self-development of people giving before expectation everyone wins it was a it was the antithesis of everything that Yoga is and how to put the love of yoga into business and that that that love could actually make more profits than an ordinary business that was built on just metrics so you know usually we'll do interviews and its value tainment which is it'll be some entertainment and it'll be some value right just so you know for me I have gotten value from sitting next you non-stop from beginning to the end so in my brain I've taken 20 30 pages of notes you know that I'm gonna go back and watch this and take a bunch of notes myself absolutely incredible of a sit down here for some of you watching like for me if I'm on your side and I watch something like this I can't I'm rewatching this myself and taking notes because of how many things I could apply to my business to help you core your business to the next level you think this is just an interview we haven't even gotten fully in the book the link to the book is gonna be below make sure you click on a link to go buy the book first person that tweets us okay maybe the best commentary on which your takeaway was from this interview the first person sends a tweet best commentary what you got out of the interview will send a signed copy over to you but you got a tweet my handle which is right here as well as right here and the send us a tweet on what you took away from this interview with chip founder of Lulu or lemon thank you so much I appreciate you truly thank you so much perfect this was great thank you

Channel: Valuetainment

Views: 261,296

Rating: 4.932169 out of 5

Keywords: Entrepreneur, Entrepreneurs, Entrepreneurship, Entrepreneur Motivation, Entrepreneur Advice, Startup Entrepreneurs, valuetainment, patrick bet david, chip wilson, billion dollars, how to be a billionaire, i wanna be a billionaire, lululemon story, lululemon, founder of lululemon, history of yoga, little black stretchy pants, chip wilson interview, tedx chip wilson, chip wilson ted talk

Id: dgJITK5UXSE

Length: 53min 38sec (3218 seconds)

Published: Thu Nov 01 2018