Learning From Mistakes

Leaving the Army & Starting a +$350K/month eCommerce

Matthew joined the military in 1997. On a trip to Kabul, he was invited to visit an Afghan factory. When he found out the factory was going to shut down after the war, his elation turned to fury. But he came with a solution. He decided to keep running the factory and the factory manager agreed. Since then, Combat Flip Flops has turned into a +$350K/month eCommerce.

Combat Flip Flops Mistakes

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Hi Matthew! What's your background, and what are you currently working on?

Iowa guy. Joined the military in 1997 and left in 2006 with a few deployments to Iraq and Afghanistan. During my time overseas, I saw that armed conflict could do little to raise a nation from poverty. Coupled with my understanding of U.S. Foreign Policy at the time, I didn’t see the war slowing down. (That was in 2005)

Fast forward to 2008. I was hired by a Seattle company, Remote Medical International, for military and government sales. We focused on providing medical providers and clinics in “austere” environments. My job was to assist the government and service providers with help in “difficult” regions. On my trips to these regions, I witnessed the non-military side of war zones. In those war zones, it was entrepreneurs that were the real change makers. They set up businesses, employed citizens, and maintained their own security. Everywhere I went, I saw the same thing.

On a trip to Kabul, I was invited to visit an Afghan combat boot and uniform factory. In this factory, I witnessed hundreds of people working--this was the first positive outcome I saw from the war effort. When I found out the factory was going to shut down after the war, my elation turned to fury. Then it happened.

Combat Flip Flops Afghan Factory Workers

I looked on a table, saw a combat boot with a flip flop thong punched in it, and thought it was cool. The factory manager agreed to let me run with it and I immediately returned to my hotel room to register Combat Flip Flops domain.

Combat Flip Flops is a mission-based company that empowers American consumers to manufacture peace in war zones with economy. We work with local entrepreneurs to make fashion and lifestyle products. Each product sold funds a day of education for an Afghan girl. It’s been an amazing adventure and thankful for all of the friends, family, and coworkers that got the company to where it is today.

Combat Flip Flops Afghan Factory Working

 

How did you build Combat Flip Flops?

Painfully.

We never ran a business. Never made footwear. Never started a clothing brand. We knew where we were and where we wanted to go. The company has three founders. Donald Lee--fellow Ranger that now serves as our CMO. Andy Sewrey--my brother-in-law that serves as our president. Together we managed to scrape up enough money to get samples made, build a website, and start marketing on social media.

We presold product, built it, shipped it, then reinvested back into more inventory. We started with simple sketches and sent those to footwear manufacturers. Using their magic, they turned our drawings into footwear. After that, it was a matter of buying the tools to cut out the shapes and stamp the outsole. With that basic tooling, artisan craftsman shops turned our idea into a sexy piece of footwear.

The tech is fairly simple. To start a company, you simply need an internet connection, smartphone, and laptop. We use Shopify as our online store, Facebook ads manager, Quickbooks online, and a few other subscription apps to tie everything together.

Logistics kills most product-based companies. Until July of 2017, we managed all warehouse and shipping out of my garage. Recently we moved to a third party logistics (3PL) company to manage those services.

It’s been an iterative, and extremely painful process. We learned a lot along the way and still learning every day.

 

Which are your marketing strategies to grow your business?

We started like most people, on Facebook. That’s where people spend their time, so that’s where we advertise. The company started with fun posts and videos. It’s evolved into a process involving targeting, measuring attribution, and adjusting our content to reflect the highest returning initiatives.

Combat Flip Flops Audience

There’s no secret sauce here. You simply need to try out what works, measure, improve, repeat.

Be authentic. Whenever we attempt a “best practice,” the results are not as good as when we generate authentic content. Try, measure, improve. Repeat.

Public relations and media have been good for us. Find media or influencers with bigger followings that you, reach out, and see if they have interest in your product. If they talk, write, or broadcast your product--the people will come.

After five years of working, adjusting, and improving, we have a core team of three that comes up with ideas, builds creative, and produces content to support sales.

Combat Flip Flops Traffic Acquisition

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What were the biggest challenges you faced and obstacles you overcame?

There were lots, but the one that stands out is our footwear factory closures in Afghanistan. Our plan was to leverage the boot contracts won by the factories to cover the overhead while we built up the footwear line. Unfortunately, the factories lost their contracts during our first run. We had thousands of pairs of footwear material and no place to make it.

With no money and a basic idea of the construction process, the team built a guerilla flip flop factory in my garage and Andy got carpel tunnel syndrome sanding 8,000 individual flip flops. In spite of the fear, lack of knowledge, and no money--we delivered.

Since then, we’ve moved our footwear production to Bogota, Colombia. CFF textiles are made in Afghanistan. Jewelry made from recovered landmines is made in Laos. T-shirts and other items are made in the United States.

Combat Flip Flops Colombia Factory

Fail. Learn. Improve. Repeat.

 

Which are your greatest disadvantages?

As a company, our biggest disadvantage is that people have a hard time wrapping their heads around our mission. A team of Rangers and business people making products in war zones and funding women’s education? Who in their right mind would do that? It’s been a struggle since day one to educate the customer on the mission to get them past the “buy now” hurdle.

Personally, our disadvantages come from inexperience. We had never done this before, so we had to learn everything along the way. They say, “Knowledge comes from experience. Experience comes from failure.”

Picking up the trend here?

During the process of building & growing Combat Flip Flops, which were the worst mistakes you committed?

We fell for a lot of the digital marketing company hype. If you have any kind of success or media, you expect your inbox to be full with “digital marketing experts” that guarantee a 10x ROI, 400% increase in sales, and unicorns on payday. Most of the time, these are people that worked in an agency, learned how simple the process is, and decided to go it on their own. You’ll see great metrics and references from one or two of their customers in the sales call, get excited, then invest a great deal of time getting them integrated into your digital environment. After a few months, you’ll be lucky to see an increase in direct platform return. By the time you add in their services fees, you’re making a lot less than if you were doing it on your own.

I’m not saying all digital marketing companies are illegitimate, but it’s really tough to discern the players from the ballers on the sales calls. To date, we have yet to find a company that can generate returns from advertising better than our internal team. Spend the time on Youtube tutorials, find your market, generate your own ads, and measure your returns at a low level, then scale.

We’re of the belief that “you miss all the shots you don’t take.” We’ve taken plenty of shots with online partners and missed. As a business owner, you should learn how this works, grow your system until you can hire a dedicated team member, then scale.

 

If you had the chance of doing only one thing differently, what would it be?

If we could do it all over again, I would have focused more time on understanding the relationship between the Profit & Loss statement, cash flow, and high margin products. Lots of people watch ABC’s Shark Tank and believe they understand the process, but there’s a little more involved. Are you operating on cash or accrual method? Does your cash support the lead time on the product if your demand grows significantly? Are your bills spread evenly through the month? Or do they hit in a big chunk? Doing it all over again, we would have paid more attention to these details from the get-go.

 

Another thing we wouldn’t do is focus on retail. Over the past five years, consumers made a major swing toward online purchasing. This put a huge hurt on retailers. They’re adjusting--meaning they’re sticking with their highest margin brands and taking a little risk on new brands. Without a major windfall event where retail customers demand product, breaking into the major retailers is time-consuming, expensive, and low margin. Focus on direct to consumer sales. When the retailers come, it will be an added bonus.

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Apart from mistakes, what are other sources for learning you would recommend for entrepreneurs who are just starting?

As for websites, I want to list three:

  • PersonalMBA - I started reading a series of books from a special operation “mandatory reading list” on deployments. The majority of them were interesting and inspiring business books. When I made the transition to civilian life, the thought of sitting in a classroom turned my stomach. When looking for alternatives, I found personalmba.com. It’s a series of 100-ish books that cover all aspects of running a business. Funny thing, I’d already read half of them on deployment… Seemed logical to finish it up. I still return to these series of books and website when I have questions about my business.
  • Google - This one is pretty simple. If you have a question, ask Google. Within a few button clicks, you’ll learn that you’re not the only person with the question. Read the problem-solving options, make the best decision applicable to you, and move forward.
  • Youtube - Keep it simple. In addition to the “Google” answer above, there’s an entire community of people that video record problem-solving solutions. Down to the buttons to click. If you’re a visual learner, this is a great source for you that can be sorted by relevance and posting date. Pay attention, take notes, and put in the time.

Regarding tools, I love three:

  • Mastering the Rockefeller Habits - If every great leadership and business book got together, donated DNA, and created a baby, it still wouldn’t be as good as this book. This 100-ish page read is a prescriptive approach to setting goals, achieving them, and growing rapidly. Read. This. Book.
  • Selling the Invisible - As Cuban states, “Sales cures all problems.” It doesn’t matter if your an introvert, you need to be selling. This book helps you understand how and why the best salespeople succeed with services, products, or ideas. This was one of the first dedicated sales books consumed post-military and still one of my favorites.
  • How to Win Friends and Influence People - Customers, employees, family, mentors, mentees. Business is people. Arm yourself with the tools to be successful in most situations. Simple principles are the best and this book is Old Testament business interaction 101.

Here are some tools I use every day:

  • Google Suite - When you start a business, you’re likely underestimating what you’re going to need for emails, collaboration, video conferencing, calendars, productivity tools, etc.. The list feels endless. Dollar for dollar, Google provides the most affordable, robust platform for small businesses to succeed with the pace of modern technology.
  • Google Sheets - Yes Excel has more features. Yes Microsoft and Mac spreadsheets look prettier. Yes, Google Sheets can perform all of the functions you need to run a small business without all of the new license fees, updates, crashes, and cumbersome collaboration.
  • Google Hangouts - Once you set this up, you can have meetings at speed right from your inbox and calendar. It’s glorious for remote work companies or people that travel often.

Lastly, I hear some podcasts, especially those about yoga workouts. Yoga studios are expensive, but you can download workouts from all over the world and get a killer workout wherever you travel as an entrepreneur. Maintain the machine.

Where can we go to learn more?

You can visit our website here and learn more about our story here. Remember also to check out our Facebook, Instagram and Soundcloud accounts. Finally, you can visit my Facebook public profile!

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