HP Business Class: Jeremy Moon of Icebreaker

The year is 1995. At a 25-year-old guy, Pax has beloved Ford Fairlane 500 and sets off on a roadie around the South Island. Only this time, he's not visiting the country's best ski fields. Instead, he's got a car load of thermal underwear made out of something he thinks is miracle fabric. The fabric is merino wool and the name he's given these clothes is icebreaker. It's not a choice, right? It's a force. I never like having thought, oh, it'd be nice to be an entrepreneur. It doesn't feel like that. It feels like it's a force and it's trying to burst out of here a little bit. That is Jeremy Moon, founder of Icebreaker. From humble beginnings, peddling his wears up and down the country, he grew icebreaker into a global company that sold for $288 million in 2017. With his passion for natural sustainable materials and a desire to build a world-class business, he has earned icebreaker a special place in the psyches of outdoor enthusiasts all over the world. This is the extraordinary story of how Jeremy Moon turned a little-known South Island sheep with curly horns into a household name. I'm here at the Duplicie Ellen, and this is HP Business Class with News Talk ZB. When we ask business leaders where their entrepreneurship came from, they often date it right back to their childhood. But for Jeremy, he can trace his entrepreneurial spirit back a lot further than that. My great grandfather is Goldminer, and he was one of the most successful Gold miners in the South Island. He actually was a relentless entrepreneur. He created all kinds of new ways of extracting gold and got the record for the most number of ounces of gold out of the river in one day. Fast forward three generations, and Jeremy is spending periods of his childhood living in America and doing some prospecting of his own. I'd buy toys, and then I'd bring them back to New Zealand, and I kind of worked out that they're worth a lot more here, and I'd sell them at garage sales, so I used to have garage sales quite often, and I'd hustle my parents' friends to donate stuff, and that's how I raised money as a kid. So that's kind of where I discovered the excitement of trading. Growing up in Christchurch, Jeremy spent his younger days looking longingly at the southern Alps, and going skiing as often as he could. After studying marketing at uni, he moved to Wellington for a job as a researcher, but the deep desire to go out on his own was still bubbling away, and that's when Serendipity paid him a visit. So I was single at the time, 24, and met an amazing American woman who was travelling around New Zealand every, and on the way back from her tour, she came and visited me in Wellington, and said, "Hey, I've stayed in this incredible ranch," she called it, and I said, "What do you mean?" She goes, "It's a ranch. It's a farm." And she goes, "Actually it's a station. It was a marino station, Poa Newi Island, in the middle of the Malper sounds." And she stayed with a family, Brian and Fiona Brackenridge, and she really thought I needed to visit them, because she knew I was interested in marketing, and he had this prototype fabric that they'd created from marino wool. So Brian and I met at a cafe, and he literally threw me a t-shirt that he'd made, kind of a sheriff's singlet with a very long back, and said, "Try this on." And I whipped off what I was wearing and threw it on, and that was a very powerful moment for me, because he was this thing from the mountains that was entirely natural, that felt gorgeous, which was nothing like the heavy odd sweaters that I used to wear skin, and I was a kid, because I hated wool, right? It was itchy and heavy and ugly, and he said, "It's marino wool." And I never heard of that. But I wore this t-shirt, I wore it to bed, because I didn't want to take it off, because it felt so great, so I slipped it on into my suit, made me feel happy. I'd go for a run after work, that's what I wore, and went out that night, I kept it on, you know? So here I am a week later, I'm still wearing this thing, going, "What is going on?" And it didn't hold odor, and it just regulated my temperature, and it was this kind of miracle fabric, because all I'd worn doing sports was stinky odd polypropylene, which was a vat thing, because we would solve these lies from these chemical companies, but how technical it was. And I did research into that, and I realised it was just extruded plastic, you know, with chemicals on it. It was only good at working, it was like blotting paper, but the qualities of the fiber and this marino were outstanding, and I thought, "Oh, I think this is it, you know?" I didn't know what it was, but I felt like this is it, and I'd been doing some kind of like personal growth stuff to try to connect more to my intuition, so it was that follow your dream type moment, follow your heart, and that's what I did. Jeremy started getting into the nitty-gritty of what a business centered on this amazing fabric might look like. So I worked out a deal with Brian, where I raised some money, and kind of bought the concept. He taught me everything he knew about how to make this prototype fabric. I engaged Brian Richards to help me with the brand side, and built a board of advisors that put in some capital. I needed to get 25 grand of my own money to stick in, so I rang the BNZ and told them my house needed a new kitchen, so they gave me 25 grand for the kitchen, and I put that as said capital into icebreaker, and then raised 200,000, eight parcels of 25,000 from people that I knew. So actually it was this kind of team that I'd built around myself, I didn't really know what I was doing, and all we had was this idea. We didn't have a brand name, we didn't have a product, we had a piece of fabric sitting in the middle of the table saying, well we could do something with this, we don't know what it's going to look like, but this is amazing. So half of that money we invested in design. Now the two types of design is the design of identity, which is called branding, which just means defining using language and imagery, where you fit in the market. So where we fitted was natural and performance, because that zone didn't exist, because if it was performance, it was also synthetic, if it was natural, it didn't work, it was like heavy wall or cotton, you'd freeze to death in the mountains. So we kind of created this new place, natural performance, and then we said, right, what are all the brands doing? And they were all imagery of sweaty men climbing mountains with ice axes, trying to get up Mount Everest faster than each other, real rugged, he man stuff. But all my mates were going like, hiking and mountain biking and having fun, having a few beers, and it wasn't serious, right, we weren't competing. So we kind of made it more about the kind of joy of it venture. So we had this sense of identity. We had a beautiful looking logo. We bought on a product designer after the brand work. There was no internet in 1995. So I went to the yellow pages. There were no designers in Wellington. There was a bridal designer, which was as close as I could get. So rang a few of them, most of them were a dead loss, but there was a woman, Alison Blaine, who was also a skydive instructor and very adventurous. And she goes, yeah, come on, you know, come on. So we had a lot of sessions mocking up little prototypes. And we built a very small collection of just five pieces. The breakthrough piece was called the original zip. And it was a long sleeve top with thumb loops in it and a zip. And actually the making of icebreaker was the combination of the t-shirt with that original zip. Because you could wear the t-shirt by itself to go running and you could wear the original zip by itself, or you could layer the two. The fiber is kind of locked together and it became a layering system. So icebreaker actually shifted. The original idea was thermal underwear. And it shifted into being a natural layering system, which sounds a lot cooler, because to be honest, I was slightly embarrassed. What do you do? It's like, ah, thermal underwear. It's like, ah, you know, it was a bit kind of old man. I want to something cooler. So we created a natural layering system. Right? Who doesn't want one of them? So half our capital was defining the idea, giving it brand expression and imagery and getting the prototypes built. And then the rest of the capital went into manufacturing. So we pulled together a little team in the South Island and we, you know, started manufacturing for samples. And yeah, that was how we started icebreaker. Having spent all his capital on branding and manufacturing, Jeremy didn't have much left for marketing. And this is where his Fairlane 500 comes in. Starting with the South Island, he drove town to town making a b-line for the outdoor stores. And I'd say to them, so you're all about connecting your customers with nature, right? They go, yep. So they go, okay, cool. What's better to wear a natural product or plastic? And they go, ah, oh, natural product, of course, but we haven't got any. And I go try this. And I'd just give it to the owner and a couple of people in the store. And I'd say, you know, I'll come back in a couple of weeks and then I'd drive off. And they'd get this product and they wouldn't know what it was, right? I wouldn't give it to everyone because I wanted some of them to have it and some of them not to have it. And then the people that didn't have it want to know what it was like and the people that did have it, it felt like they were in the know. From that first trip around the country, Jeremy got orders from 14 stores. So he turned up at them and installed his products with some pretty racy imagery. So instead of a sweaty middle-age man climbing a mountain with a nice axe, we had two quite young glamorous people taking their clothes off in front of a waterfall. So you get this kind of powerful imagery of this crashing waterfall when people were taking their clothes off. Half the outdoor stores wouldn't put it in their store except it was disgraceful, right? But the ones that did you get, you know, sweaty man with a nice axe, sweaty man with a nice axe, people taking their clothes off in front of a waterfall. It's like, wow! So it was super impactful and it was designed to stop people on their tracks. So when you've got nothing to lose and we're up against all these traditional mainly American companies, we had to be bold and not be them in order to get people to bother to stop and go, what, who are these guys? Jeremy decided that the more personal marketing strategy of pushing the product to outdoor stores was the way forward. So he gathered a team of just the right people to do this all over Al Teroa. And we became the best probably in the world at training those staff to be passionate and to tell our story on our behalf. So it was super organic, super authentic, because all these people were young, cool outdoor people, their climbers and our free skiers and, you know, really living the lifestyle and if the product didn't work, no one would push it. So Jeremy was having a blast building a brand new business in his mid-twenties and the sales team were having fun traveling around selling a product they were out in nature using on their days off. But how was the company actually doing? So I'll tell you our revenues, right? First year 110,000. We made $100,000 loss. We needed to raise a little bit more capital, which was terrifying. Second year, $330,000 revenue. We made a $512 profit. No Todd, who was chairman and a mentor for me said, "It's the first company I've been involved in, Jeremy, where you can drink the profits and still remain sober." So it's like, we broke even a year too. And then we went $751.1. So each took us four years to get to a million bucks. A first gross bit happened in 1999 when we jumped up to $5 million and it's because we sold them to Europe. It was with a store snow and rock. I went to London and I said, "Who's the best outdoor store in snow and rock?" I was convinced I could crack them. I could crack the Europe, right? It was a bit of a leap, but for me it worked. And in 2000 we did that. And that's when things really took off. Demand grew exponentially, but there was only one problem. Our manufacturing, which was in Christchurch time, could not keep up. And trying to make things scale like we were. Really, it didn't exist. The technology was very old and the parallel industry in New Zealand was in a state of disrepair. So we were following six weeks, eight weeks behind, snow and rock were going, "Love you guys, here's an invoice for delivering late. It was £40,000. We didn't have that." And it was like, it was like someone put a gun to my head, right? And it was a moment where we'd proven the concept, it had global, the beginnings of global recognition. And if we couldn't deliver on time and keep the growth up, bang, we were going to get swamped by a big company like Patagonia or something like that, who would have jumped in and filled our space. After years of blood-sweeting tears, Jeremy finally has international demand for icebreaker. This is the moment he's dreamed of. Only he can't make the garments fast enough to keep up. And if he can't keep up, he faces the very real danger of icebreaker collapsing. So how does he get through the crisis? That's next. HP started in a garage 80 years ago, founded by two pioneering leaders, Dave Packard and Bill Hewlett. Dave is famously known for saying, "The betterment of our society is not a job to be left to a few, it is a responsibility to be shared by all." HP is New Zealand's number one selling PC and printer brand and is constantly reinventing products and solutions for a more sustainable planet. Learn more at hp.co.nz/hpforbusiness. HP, keep reinventing. It's the year 2000 and the new millennium brings a wave of new demand for icebreaker. After years of painstakingly building the brand, Jeremy has finally cracked Europe. Orders are coming in thick and fast, but he has a massive problem. They can't make the garments quickly enough to meet demand. So Jeremy put his thinking cap on. So I said, right, where is the technology that will let us innovate? Where is the capability and the capacity that will let us grow and be a truly global brand? What do we do? How do we actually do that? And I looked at companies like Nike and what Nike did was they held their design, they held their management close to their heart and Oregon, where they were founded. But their manufacturing, they put wherever the technology was. Now they lost the plot later on and ended up doing switch shops and things, which actually taught me a lot too about how not to do it. So I did a world trip. I went through different parts of Europe, I went to Turkey, I went to Italy, went to different parts of Asia, Vietnam, China, I went to the Americas, looking at all the different manufacturing options. And the best technology I found wasn't China. And they were building whole campuses that looked like university campuses that had on-site accommodation. They had higher environmental standards than what I was used to in New Zealand. They had way higher quality standards. They had water reclamation on-site, heat reclamation to reduce energy consumption. It was incredible because these were brand new state of the art plants. So we became the foundation customer, where we agreed to take 50% and helped one of these things get underway. And we partnered with them for 20 years. That gave us access to scale and technology. And I got a lot of hate for it. People go, oh, you're a sell-out. What happened to maiden New Zealand? And I said, hold on. We do in New Zealand what we're good at. We are the best in the world, by far, at Grown Marina Wall. We have the best brand ideas, which is why we have a design studio capability. So we were crowding jobs, but in a totally different way. And that for me was the making of icebreaker. That led us go from 10 million to, you know, this year we'd do over 300. Of course, as the turnover increased, so too did the size of the company. And this meant that Jeremy's role as founder was changing dramatically. And it wasn't a change that he found easy to make. The hardest journey for me has been with myself because I'm not trained as a CEO and most founders aren't, right? And it's really hard for entrepreneurs to actually work out how to be a good leader because often they're good ideas people. My mental model at the beginning was, I'm going to build this and literally I am because I was the only employer of the company for a couple of years. And then I hired my flatmate, Michelle Mitchell, joined me. And then it was like, we, you know, so even that was like a big change. And then we built a small team together of about eight people. And we'd sit in a circle in the morning and have morning tea, you know, on the floor, cross-legged, and that was cool. And then there was 18 people in the company. And the model that worked when I was just Michelle and I didn't work when there's 18 people, I had to learn how to delegate. That was grishatingly difficult for me because founders are control freaks at the beginning because they have to be, they have to have their fingers over everything. And then if you don't let go of things, your business will fail because you become the impediment. And then you learn some pretty brutal lessons about hiring people because delegation only works when you can trust the judgment of who you delegate to. And it's actually very hard for a small company because you can't really hire top-class people because you haven't got any money. You can't pay more than anyone else. So you end up, well, I ended up getting really young, gritty people like me that were, you know, a head of sales had a background in hospital. So it was just people that kind of were up for the challenge. Years later, when Icebreaker was a worldwide brand, Jeremy had the self-awareness to realize that having him as CEO wasn't going to give the company the best chance at reaching its potential. One of the things I'm most pleased about was when Rob Fife joined the board as chairman. And it took me a year to convince him to swap jobs and for him to be CEO. He wasn't looking for another job, but he could see the company really needed it. And Rob is like, these CEO, he's a fantastic guy. And he really built the company into a proper company. So also part of my journey has been learning to kind of let go. And ultimately, we sold the business. Icebreaker was sold in 2017 to VF Corporation, which owns the North Face and other brands for an impressive $288 million. For Jeremy, this was always the natural progression of Icebreaker, because he was consistently asking himself this question. How do you build a company that is guided by the values and the principles of the founder, but doesn't need a founder? And that's given me freedom for my family and also freedom to look at other businesses from New Zealand that I can build. And sure enough, Jeremy has rolled up his sleeves and spent the last couple of years working on a new pet project. A guy just loved working with Rob Acton called me and he said, hey, do you want to start a new business? And I said, yeah, not because I particularly wanted to start a new business, just because I thought the idea of working with Rob again would be cool. And he goes, dog food and I go, I'm in. He didn't actually said pet wellness and I thought, okay, that's cool. It's a good space. So we've created a new product called Animals Like Us, which is a blend of raw New Zealand meat and organs, which we freeze dry. And then we blended that with the high protein dog biscuit and the combination of this high protein biscuit and this raw product. It's like the difference between good old cornflakes and an amazing bowl of muesli because it's a great innovation because it's this huge variety of flavours and textures for the dog. That's super exciting. Yeah, the problem is now parties, people go, oh, really apparel. That's what they used to say. And they go, oh, dog food and they go, ah, it's at the time, you know, kind of walk off. But that's all right. So clearly Jeremy isn't in it for the popularity. So what does drive entrepreneurs like him? I know. Lots of billionaires all around the world. Lots of super successful people. I do not know one of them that are in it for the money. Not one. They're all in it for the thrill of building something and the thrill of building something great. And having a deep sense of commitment was always what pulled me through. And the breakdowns always formed the breakthroughs. I'll give an example. I got a letter from, I'm Rhino Grover who said in 1997, you're a disgrace to the industry. I've tried one of your garments. It's falling apart. And I was so shocked. I went in to break down, right? And I said, I'm a disgrace to the industry. Oh, man. Not the plan, right? No, I'm not. So I went and stayed on a marina station with a guy named Jim Murray in Glenmore. And we actually sent bales of his wall through the whole process and we traced it. And we found out the reason her garment was falling apart was because we weren't controlling the tensile strength, which is has strong fibers. And the reason it had low tensile strength was because the animal was unhealthy to get a high quality product. We needed to go deep into animal welfare. So the breakdown set off a mini quest, which led to a breakthrough, which was an unbreakable foundation of icebreaker. Since inventing the world's first marino will outdoor apparel, icebreaker has been emulated by over 50 competitors. Some of them becoming big names. So what does Jeremy think of all this copying? It's awesome. It's what the whole purpose of icebreaker is. From a serendipitous meeting with a South Island marino farmer to selling icebreaker for $288 million, Jeremy Moon meticulously crafted the brand and worked tirelessly to reach his market. So what advice would he give other business people who have their eyes on that kind of growth? That's next. No matter how big or small your business, the Elite Book X360 with Windows 10 Pro lets you focus on the business instead of your IT. With hardware enforced security, exceptional battery life and Windows 10 Pro, the Elite Book X360 offers performance and reliability in a sleek and stylish design. Shift to Windows 10 Pro with the new HP Elite Book X360, only from HP. New Zealand's number one selling PC in print brand. Search HP for business. HP recommends Windows 10 Pro for business. In 1995, Jeremy Moon convinced 14 stores in New Zealand to stock his new marino garments. These days, icebreaker is sold in over 5,000 stores worldwide with annual sales topping $300 million. So what advice would Jeremy give other entrepreneurs wanting to see their business succeed? Here's what you don't do. You don't focus on the manufacturing and how to make the widget. You focus on the market and how to find a position in the market where there's some white space. And then you understand who your customer is. Is a woman aged, you know, in her 20s and 30s? Is it a middle aged guy? Because those two people, they'll respond differently to different stimuli. They'll be reading stuff through different channels. They'll have different needs because they'll be at different stages of their life cycle. How do you then create a brand with exciting, interesting imagery with a product which is a physical expression of that brand? So you get this alignment. My advice is for people to put 80% of their effort into that and then find great people that can help you make it and work out logistics and finance and other stuff. So I'm very passionate about that and help out quite a few young entrepreneurs who are on their journey. I hope you've enjoyed this episode of HP Business Class with News Talk ZB. I'm sad to say we've actually come to the end of season two. It's been an amazing journey bringing you these inspirational stories from some of our country's most inventive and ingenious entrepreneurs. I hope you're feeling newly inspired for your next project whether it's a business or something entirely different. If you haven't heard all the episodes, we now have a full two seasons worth that you can find at NewsTalkZB.co.nz/businessclass or on your favourite podcasting app. If you've enjoyed this episode, give us a five star rating and share it with others who may enjoy a bit of insight and inspiration from extraordinary business leaders. Thanks for listening. I'm Heather Dupnessy-Ellen and this is HP Business Class brought to you by HP and NewsTalkZB.