This week’s featured founder is Daniel Alarik, Founder of Grunt Style. Grunt Style is a brand for Patriots; a brand that has reached incredible heights at unbelievable speeds. For the month of November, we have been focusing on Founders who are Veterans. Daniel served in the United States Army for 8 years and left after a tour as a Drill Instructor.
This week’s featured founder is Daniel Alarik, Founder of Grunt Style. Grunt Style is a brand for Patriots; a brand that has reached incredible heights at unbelievable speeds. For the month of November, we have been focusing on Founders who are Veterans. Daniel served in the United States Army for 8 years and left after a tour as a Drill Instructor.
Daniel started Grunt Style with a mere $1,200 and grew the company to one that is exceeding $200 million in revenue today. He shares practical and actionable wisdom about how he got from Point A to Point B in the process. Daniel also shared about the value that comes in building a business without investment capital; it forces you to make decisions based on cash flow and ensure the business is profitable as you scale.
Daniel brought us some tremendous entrepreneurial value. He even put me on the hot seat with a brief interview of his own! Before we go any further, as returning listeners know, his entrepreneurial journey really started a whole lot earlier...well before Grunt Style was an idea. This is Daniel Alarik’s startup story.
“By not taking investment capital in the early days it forced me to focus on building the company the right way.”
—Daniel Alarik, Grunt Style
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Special Guest: Daniel Alarik.
The Startup Story - Daniel Alarik
Daniel Alarik: Hi. This is Daniel Alarik. I'm the founder of Grunt Style, and this is MY startup story.
James McKinney: Every wildfire began with a spark. Every superhero has an origin story. And every single startup has a moment that they point to as their beginning. And every founder has a purpose that drove them in the midst of all obstacles. THAT is The Startup Story.
James McKinney: Before we jump into this week's episode, I want to read a review from Aphenia that gave the show a five star rating and wrote, "I really enjoyed your conversation with Christ Brownridge. The conversation felt so open and genuine to a degree that's very rare to hear on any podcast, let alone one about entrepreneurship." Well, thank you Aphenia, and that is exactly why I started The Startup Story. I got tired of only seeing the formulaic narrative that if you simply hustle and grind, then you'll succeed. That's just not the truth. Successful founders everywhere have struggles, and I wanted to bring that real talk to the table. I'm glad you found the show and I hope you'll continue to listen, as well as tell your friends and network about it.
I say it every week because I mean it. If you have found any value in The Startup Story, please leave a written review on iTunes and plug your brand, URL, or social media accounts. If you do that, then I will read your review in an upcoming episode and it becomes a mini ad that lasts for years. It is just my way of saying thank you for taking the time to leave a review. The written reviews mean a ton for being discovered within the iTunes platform. I'm not sure if you've noticed, but Apple podcast has recently redesigned their navigation, and finding great shows has become a bit more challenging. Climbing the charts in iTunes or I guess should say Apple Podcast now is not just about listeners, but it's about engagement. Listening is one way Apple Podcast measures engagement, but written reviews have a multiplying effect, so please leave those written reviews.
I want to give a special bit of thanks to the team at Fuse Dynamic Work Spaces for allowing me to use the podcast studio for this special recording. If you notice a difference in the sound quality, it's because of their podcast studio space. I've been in a lot of co-working spaces, and I've only been to one other place that has a podcast studio, and Fuse's is absolutely incredible. So visit workatfuse.com, book your space if you're in the Dallas/Fort Worth area. They're opening a Houston soon and Austin following that. Again, workatfuse.com. Thanks so much, team, for allowing me to use the space. Now, let's jump into this week's episode.
Our guest this week is Daniel Alarik, founder of Grunt Style. Grunt Style is a brand for patriots, and one that has reached incredible heights at unbelievable speeds. We discuss revenue figures in this episode, so you want to make sure to keep listening. You'll also want to keep listening until the very end, because Daniel puts me in the hot seat with a brief interview of his own. It has never happened before in the 47 episodes we've had of The Startup Story, so you definitely want to listen until the end.
The reason we're highlighting Daniel's story is because for this entire month, we have been focusing on founders who are veterans. Daniel served in the United States Army for eight years, and left after a tour as a drill instructor. For those of us who have served, we know that there can be an entirely separate podcast episode solely about his time as a drill instructor. Huh, I might have an idea for a second podcast series, the DI Story. But at any rate, Daniel's story in how he grew Grunt Style to where it is today is a really practical one for all of us because it all started with just $1,200 and the willingness to put in the work. Well, that is 100% accurate, but if we're really honest, his entrepreneurial journey really started a whole lot earlier than that.
Daniel Alarik: My dad has been an entrepreneur for most of his life. In the late eighties he was working for his dad who had his own business outside of LA. My grandpa passed away and my dad packed us up and moved back to Chicago, which is where he grew up, and started his own business. He had a few good years and a lot of bad years of success. It was hard to really learn from that, but some of that vocabulary was always floating around. Not the word entrepreneur, but being business mindset and everything like that. And I have three other siblings, and during the summer I remember the game we would play together as kids was called business actually. So each one of us would have our own business. We would go around and we'd have fake money and we'd sell and trade goods.
James McKinney: That's awesome. But growing up, did you… first off, I'm a believer in birth order so where are you in the sibling order? Are you middle, the oldest, where are you at?
Daniel Alarik: I have an older sister, but I have two younger brothers.
James McKinney: Older sister, two younger brothers, okay, perfect. So your parents definitely learned from their parenting missteps on the first. That's just the nature of the beast. So as you were growing up, getting into high school years, did you think you wanted to be an entrepreneur, or were those bad years of your dad's business a deterrent for you? Like I don't want to do this, I want something stable. What were you thinking?
Daniel Alarik: Absolutely. Yeah my dad would always encourage us, "Well, I can't wait for you guys to finish college and we'll go in business." And nobody, none of us, wanted to have anything to do with that because it was just so unstable. It was all over the place. And usually it was, and I'm sure he tried to hide it, but there were a lot of desperate moments. I remember one day all we had was $5 to feed the family of six. We bought a frozen chicken and a can of peas, and that's what we ate. It worked, and that's something that we learned from him is sometimes you've just got to make it work.
But there was a lot of really tough years. I think my dad struggled with learning about all the fundamentals of business, of money management, and some basic operation stuff where he would focus on his strengths, but he didn't really outsource his weaknesses and that caused a lot of issues. It was a big deterrent to all of us. Nobody wanted anything to do with him and his business, unfortunately. We all liked him, but it was just no, no, we're good, we don't want any.
James McKinney: I think that's part of, for a lot of entrepreneurs, they see how blessed the entrepreneurial journey is because the parents business fires on all cylinders and they just see the freedom that comes with that. They're not exposed to a lot of operational things. Or they see the challenges that it brings because the challenges tend to come home, right?
Daniel Alarik: Yeah. I remember it was on year two or three of Grunt Style, and we haven't really taken off yet. We're seeing some minor successes. It's still me at this point, too. I don't have any employees yet. My dad says, "Let's go grab a bite to eat." I said, "Actually, I've been dying to do that." So we go to a fancy meal at Steak and Shake. He's like, "You know, Daniel, I never had a good conversation with my dad. So if there's something that you feel you want to know, what wisdom can I give you?" I'm like, "Sure." I said, "I have a question dad. Don't take this the wrong way, love you to death. I'm scared to death of ending up like you." And he's like, "Wow. What do you mean?" Again, I love him to death. He's really a good man, but he always struggled in business. So then he asked, "What do you mean?" I said, "You're in your sixties. You don't have a penny to your name, and you are still struggling. I am scared to death of going down that path. If you had to do it over, what would you say I wish this was different?" and he thought about it for a minute. To his credit, he was pretty open about it. He said, "I never understood finances. I thought I could just out revenue my financial problems. Sometimes I did, and a lot of times I couldn't. I wish I understood how money worked better." And a few other things, but I really appreciated that time he spent with me to say you know what, yeah I had some successes but avoiding some of my weaknesses caused a lot of problems.
James McKinney: That's incredible that he would be so reflective of that challenge, share with you in your early stage of Grunt Style. Too, just a few episodes ago we had Chris Brownridge, the founder of GawkBox. He raised $4.5 million and just shut it down this past July for the same thing, that he didn't quite figure out his churn, his customer acquisition, the lifetime value of the customer. And just kept raising money, and that was covering up the problems he had until he couldn't raise money anymore, and it just dissolved.
Daniel Alarik: You probably know this better than most. That is unbelievably common.
James McKinney: Yes, it is. I think a lot of people get too fixated on they turn their business into how fast can I raise money versus how fast can I sell, and even inside of that it's am I profitable regardless of how fast I'm selling. I know that's part of your story and we're definitely going to get there. But in your high school years, you knew you didn't want to follow your dad's tracks. What was your next step as you were coming… because the end of high school is a natural chapter for us. What were you thinking you wanted to do?
Daniel Alarik: Well, it's not as sexy as I'd like to make it to be. Honestly I was an awful student, C's and D's all the way through. I had a few classes that I had straight A's all the time because I liked those classes, history and sometimes English or whatever. Other classes, I just bombed. I just didn't care. I don't want to learn that, so I have no interest, and I was an awful student. Then come senior year, I'm trying to think what am I going to do. I'm like okay, I could still go to a college I guess and then work for somebody else, and then die. That sounds awful. I want to do something that's bigger than myself, and I don't want to go down the business route. I don't know what to do. It just so happens a recruiter called. He's like, "Hey, ever thought about joining the Army?" I'm like, "No." "Well, why don't you come on down, we'll talk about it?" and I did. And then so I joined the Army.
James McKinney: I love how many veteran stories that is the case. For me, joining the Marine Corps, I joined the Marine Corps because I wanted to go to college but I couldn't pay for it. I'd lived on my own since I was 15. Marine recruiters are the ones on campus all the time, so that's like oh, you're always here, you must be the branch I need to join.
So you join the Army. What did you want to do? Real quick, what year did you go in?
Daniel Alarik: 2000.
James McKinney: So the internet was a thing when I went in. All we had was a big book of MOS. There was no Google search to find out what the job was. What did you want to do going into the Army?
Daniel Alarik: I had no idea what the Army did or anything whatsoever, or any of the branches. Actually, I originally was going to enlist in the Navy so after you take your ASVAB score, I was talking to a Naval recruiter at the same time. I was signing up to be a nuclear technician, because I thought it would translate into a good job afterwards. I'm like great, qualified to do this, this will be fun. So I'm going through the requirements with the recruiter and they said, "Great, you're qualified. We'll get you into school. Here's the school date we can get you in, and it's a two year school with an eight year commitment." I'm like, "That's a long time, you have anything shorter?" They're like, "No, it's a lot of school. But you get to work, great opportunities when you get out," which is what I was looking for. I asked them, "I'm going on a submarine, right?" They said, "Of course." And then said, "How many women are on this submarine?" and the recruiter laughed at me. He's like, "There's no women on the submarines." I'm like wait a minute, I have to commit to eight years to live by myself? The recruiter was trying really hard to make it better, and I'm like guy, I'm 18 years old, come on, this ain't working. So I went across the hall, went to the Army, and made it work from there.
James McKinney: That's awesome.
Daniel Alarik: So I was at the Army and I said, "Listen, I want something that uses my brain and I can use my hands. And I want to remain fairly independent." I signed up for communications, which is like a signal support systems specialist, which was a six month school at the time. I think it's like four weeks now or something. After that, 9/11 happened. I got deployed a couple times and when I came back home, rejoined the Army Reserves and then I switched over to, I wanted to go to a drill sergeant unit. So I switched over to infantry, and then went to a drill sergeant unit, and I did that for a number of years.
James McKinney: You were a drill sergeant while serving in the Reserves?
Daniel Alarik: Yes. So there was a reserve drill sergeant unit outside Chicago, and it was an infantry reserve unit. So I joined them. I didn't think anything of it. I just thought this is going to be cool. So I went to drill sergeant school. We were the last class out of Fort Sill out in Oklahoma. It was good class, very proud. You could sign up for missions where you could go down to basic training installation and run that for a few months, so I did that. I got back and we were getting ready to… couple buddies, we were ready to jump on an Afghanistan deployment with a mig team, go train the ANA. Right before they did that, our division put a stop loss on our unit because they were so short… this was 2009. They were so short on drill sergeants and training command that they stop lossed the entire unit, and then they just mobilized us as active drill sergeants for the next couple years. So I did that for a few years.
James McKinney: How was that? Because from an outside observer, that seems like the best job in the military.
Daniel Alarik: The first two cycles, so you judge them by cycles. Every cycle is about 15 or 16 weeks. First two cycles were fantastic. The first one, you don't know what you're doing and you're just starting to realize how much power you have, and how weak the recruits are. It's fascinating. You think these guys coming out of high school, playing football, wrestling, whatever, are going to be strong and powerful and they're unbelievably weak. But it's great. You realize I have a chance to instill what my vision and values of what the military should be like into this next class.
So the first cycle, you're trying to figure out what you're doing. The second cycle, you've got it pretty well and you're still high energy. By the third cycle, you're kind of on auto pilot, but you start wearing down really fast. I did about eight and a half cycles, and about 2000 total troops through all the companies I was in. it's exhausting.
James McKinney: It's funny that you share some of those memories about what you realize in the first one. For my listeners who have served in the military, you definitely have funny memories of your time in boot camp, your drill instructors. They are some characters. And for those who haven't served in the military of my listeners, ask any veteran and some of their fondest memories are the early days. There's no political correctness. It's a world that operates in a vacuum and I love every bit of it, so hearing from the drill instructor side, unbelievable. So good.
So one of the things that I've noticed in our short conversation together is that you have a propensity to just always be forward thinking. From your childhood, you knew you didn't want to be following your dad's business. You had the opportunity to go on a sub, you were forward thinking to say I don't want to commit eight years to celibacy if we will. So you were always thinking down range a bit. So as your time, when you flip to reservist and you're reactivated as a drill instructor, as your time as a drill instructor came to an end, what were you thinking you wanted to do at that point? What had everything been leading towards?
Daniel Alarik: Absolutely. So after I did that, you recall I did that first three or four months, that first voluntary cycle before I got voluntold. During that time, I was dating a beautiful girl, and we broke up during that time, but as soon as I came back I'm like you're the girl for me, I can never do better, that's obvious. So we got married. She got pregnant. And this is a span of two or three months. We got married, she got pregnant, and then I left for two years or so. I missed her entire pregnancy, the first year of my son, because she stayed in Chicago. I was down in Georgia.
So as my time was coming to an end, I'm thinking how am I going to provide for my family? I've been in the military at this point for about 10 years. About five or six of those years are military time. I don't have a college education. I don't have a lot of career experience. I was a personal trainer for a couple of years. What can I do to provide for my family back home? As an infantry drill sergeant, there's nothing in Chicago, or anywhere really. And the other thing is I didn't wanted to get out. I really loved my time in the military.
My wife was making it pretty clear that she was not okay with that lifestyle, so I knew I had to figure something out. So I had two problems. How do I provide for my family and second problem was how do I keep that connection to the military? So I was running out of months. I must have had four months left or three months left.
James McKinney: And what year is this, as a timestamp?
Daniel Alarik: This is 2009 or 2010. I was sitting on the range with the troops and I'm thinking to myself how do I solve these problems? I decided to combine my problems of making it my career, or my mission or my job, to spread that culture of pride and patriotism that we have in the military that I wanted to keep that connection to, because I was willing to bet there's other people out there that for whatever reason had to separate whether it was after deployment or after their time in service, or whatever, medically discharged or not, that wanted to keep that connection to that culture. I said what if I made it my mission to spread that mission of pride and patriotism? That's what I ended up doing.
James McKinney: That is amazing to me one, sitting on the range thinking about those two problems. Again, it goes back to that comment I said. You're forward thinking. You're always thinking a few steps ahead and it's incredibly wise of you because I think most entrepreneurs, we can either think too far or we think just about the now. I think you operate in a very safe space, great place, and just that few steps ahead. And I'm sure you have long-term vision when it comes to Grunt Style.
You're sitting on the range and thinking of those two problems. Were you thinking, as Grunt Style came to be, that your target market were those connected to the military, either current or past? That's who your target market was?
Daniel Alarik: My target market was me. My assumption was there are people just like me. The first products I made, the first people I talked to, were just like me because I figured that would be the easiest person to communicate w.
James McKinney: Awesome. So your time in the military comes to an end. You have this idea for Grunt Style. Don't know if it was called Grunt Style at the time, but you have this idea of wanting to keep the patriotism that comes with serving our country connected to those who are no longer directly attached to the military. What were your next few steps after you get out of the military?
Daniel Alarik: I was talking this over with my wife. And there's a lot more complicated details to this, but to kind of make it the timeline of events that are most direct are I talked it over with my wife. I had about $1,200 and I made a bunch of t-shirts that I thought I would like to wear. Put them in the back of my car and started travelling around the country to different states, selling at flea markets, county fairs, MMA events, different military installations. I was very familiar with Fort Benning so I spent a lot of time down there. Even for about six months I had a little kiosk at the military installation mall, at AFES, just trying to see what worked, see what stuck. A lot of times I'd sleep in my car on top of the product at night, then set up a table and sell the next day at whatever event.
James McKinney: How did that address your wife's concern about the military lifestyle and being gone?
Daniel Alarik: Well, when you're an entrepreneur, all you have to do is get the right people involved and they're going to buy it, and they'll tell their friends, and they'll tell two friends, and the next thing you know in a matter of weeks or months you're a multi millionaire overnight. Thus was my assumption and I was completely wrong.
Honestly, it took about three years. During that time, our unit went back onto a stop loss program. I got called back involuntarily again, so there was a little interruption there as well. My normal cadence when I was travelling around was I would be on the road. I would travel about 4,000 to 6,000 miles a month or so, but I would only do it about two weeks out of the month. So I was home for at least two weeks and during that time, I would work as a personal trainer at a gym. I'd schedule everything as best I could.
James McKinney: That's incredible. So with your $1,200 though, and I think this is an interesting point because one of the things I love about seeing the success that you have now, knowing that it started with $1,200. There's amazing entrepreneurial stories out there of people with massive success and I think a lot of times we look at it and say, "Oh, I couldn't do that." They forget that it started with, in your case, $1,200. What was the mindset with the $1,200? Was it just how fast I can flip this and turn it to make $3,000? What were you thinking and how did it play out against what your assumptions were?
Daniel Alarik: So I didn't have a mentor. I had some people that I worked with over the next few years, but when I was starting off I had no idea who to talk to, how business worked. I even Googled "what is business" with very disappointing results at the time. I just had no idea. So I'm like all right, I don't know what to do but what would I be happy with, with $1,200 worth of goods? Can I double it? How can I double it? And that's all I cared about. If I could double that, how do I double it again? That's all I focused on. I was just Googling everything, creating massive amounts of spreadsheets. I would, when I'm on the road I'm listening to audio books the whole time and I'd go through five or six books a month. I still do audio books today. It's always trying to learn, fine tune, and figure out how can I take what I have and double it.
James McKinney: So your first steps were flea markets, outside bases, being a part of where the military community was residing if you will.
Daniel Alarik: Yeah. I didn't know where they all were because I'm not a sociable guy, so I don't hang out. So I'm trying to figure out where do people go hang out so I can talk to them. I knew in a short amount of time that online sales are going to be the most profitable by far, but how do I get people to get online? So eventually, after a couple of years, I discovered, this is 2010-2011 I discovered Facebook. I never did MySpace or anything like that, but I realized that a lot of people were connecting. I had a lot of buddies that were overseas or in the military, they're like, "Hey, look me up on Facebook so we can keep talking." Oh, it's kind of convenient. I bet you there's a lot of other military people just like me on Facebook. Again, it's 2010 and 2011, so it's pretty hot. So I started on there, and that's where we really learned to grow pretty rapidly later on in about 2011 and 2012.
James McKinney: So is it 2011 and 2012 when e-commerce really started being a thing for Grunt Style.
Daniel Alarik: It did, and it didn't mean to be. It was actually I was putting most of my stock into wholesale, which is when I would go to small Army Navy stores and get them to buy a whole bunch at a time, because I needed to move product quickly. The events that I would go to… Let me go to a quick story. In 2011, still on the road a lot, thousands of miles a month. My wife in December 2011 says, "Dan, I think it's time to shut this thing down." I'm like, "What are you talking about? I just made $20,000 last month." "Yes, but it cost you $21,000 to do it." And she was a senior accountant at Panasonic at the time, so she knew her numbers. She's like, "It's not working. You've been doing this for a few years. You did this so you could stay home and provide for the family. You're not providing for the family and you're not home." I had other jobs to provide for the family, so I was still bringing in money, but I was gone a lot. She wanted me to shut it down and I said, "Listen, I think wholesale is the way we would be going. Not events, because it's expensive." We have our first wholesale event in Las Vegas. I'm not sure if you're familiar with the story, but we were in our first wholesale trade show. Never been to Las Vegas. I said, "If we can make this work, that's our sign from the heavens that we should keep our doors open." She said, "Fine." Well, what does success look like? I said, "If we could do $6,000 at the show, that's the sign." And she says, "Okay, great." So we both went because I needed help. So we flew. We weren't poor at the time, we were just broke. Big difference, but we were definitely broke. So we flew standby. Got to Vegas, took the free shuttle to the hotel, and then we walked about a mile or mile and a half to the nearest grocery store. We bought a loaf of bread and a jar of peanut butter, and that's all we ate for the next two and a half days. She put on a tight t-shirt, ran around the entire show, told people to come back to the booth where they expected to see here, and to their disappointment I was there instead. I would try to close them on a deal.
We did that for the next two and a half days. At the end of the trip, we get back on the plane and I'm tallying up the receipts to see where we're at, did we hit this goal. As I'm tallying them up, and I needed $6,000 to make it work, that was the sign. And I'm expecting the sign, $10,000, $12,000, and it was like $6,200 or something like that. I just got made. I'm like why is this so hard? I am working my butt off. What is everyone else doing that I'm not? So I pulled out a yellow legal pad and drew a line down the center of the page. On one side I wrote down everyone in business that I knew that was better than me, which was everyone. On the other side I wrote down what they were doing that I wasn't. it was basically a game of follow the leader. So if you're in the military, you want to get better at pushups, you don't talk to the fat guy that's barely making it. You talk to the guy that crushes it every time. Same thing with running. If you want to be in front, you follow the leader until you're in front. I really took a hard analysis of who is leading the way. That's when we started to transition very quickly. This is January 2012, and that's when we transitioned very quickly from a wholesale focus to e-commerce, and that's when I started focusing heavily on social media. Because a lot of things that I saw in business was heavily digital. Email, social media, et cetera. So I started to set quantifiable goals of this is how often I should post, and then fine tune that. These are the types of posts. We were one of the first military pages to do memes. I didn't even know. I'm like me-me? What's a me-me? So I started doing those, and they exploded. So I made it my marketing goal every single day. Okay, every day I wake up, I'm not going to rest until I get a thousand new fans, and 50 new email addresses. The whole purpose of I needed the ability, like you're at an event you want the ability to talk to an audience and sell them products. I wanted the same thing but only digital. I think January that year, we did a total of like $8,000 in revenue, but with that new plan in place, by December that year we did about $64,000 or so.
James McKinney: That's amazing.
Daniel Alarik: So we just started growing really rapidly, turned into a lot of fun.
James McKinney: That's amazing. I want to talk about everything you said right there, about following the leader. That's why I do The Startup Story is to meet with amazing founders like yourself, to give my listeners a chance to hear about your steps, to hear about your journey. One, so they can follow the leader, but also two, so they can understand that the challenges they're going through are not unique to them. And to hear that you were about to quit Grunt Style because it wasn't making things, and 12 months later you're doing $60,000 a month is unbelievable proof about just what can happen when you are strategic, intentional, and persistent.
So I have to ask though. On that yellow pad, who were the people that were more successful in business that were your benchmarks, that you were trying to follow?
Daniel Alarik: One of them I remember there were two t-shirt companies on there. One of them was probably Ranger Up because I idolize those guys so much, and another one was probably just a screen printing company or something like that. But there were a lot of brands. Most of the people in that page I'd never talked to, but I just knew they were way out in front. I'm like this is stuff that I could find. Most of them were big companies that I still never really talk to today, but.
James McKinney: Do you think the shift that took place in that I think it was 2012 was when that massive growth happened-
Daniel Alarik: January 2012.
James McKinney: Yeah. So do you think that shift that took place was that you stopped looking at Grunt Style as a product and shifted it to a brand? Because really all that social media stuff, all the memes, now you're building a brand. Were you doing that before or was it really just seeing what the successful people were doing and copying them?
Daniel Alarik: I always thought of ourselves as a brand. I never cared about t-shirts or whatever like that. It was just a way to express something. I always thought of ourselves as enablers. You already believed this. We're just allowing you to express it in a different way. So I always thought of ourselves as a brand. But when your focus is wholesale, it's very difficult because your wholesale partners don't get that, nor do they care. They shouldn't right?
When you're at events, it's easier. I love going to events and giving quick, one minute spiel and trying to inspire people. Same thing I did when I was a drill sergeant. You'd go off on this almost rant and try to empower somebody until you can wake up that guy inside everybody and say, "Yeah, hell yeah, right?" and then they're inspired. So I always thought of it as a brand. Social media was just a playground that I never got into until that time to say you know what, there's a different way to do this.
I still talk to one or two vets a week that are trying to start something or whatever. Usually they're like, "How do I market?" and I'm like, "You're too small to market. You're selling." But when we're talking about social media, there's something that's not going to change. Whether it's email or you're giving a speech, or social media, nobody cares about you. They only care about themselves. They're trying to pay attention to themselves. When they see something and you want them to engage, either they're engaging because they hate it, which you're not going to have a customer which is fine because you can still engage with them. But what the engagement that you want is for someone to say F yeah, that's me, I'm sharing that, or engaging, or whatever like that. They're sharing it or engaging because they see themselves, not you. That's what social media allowed us to do is allowed people to, or at least give them where I could make a funny poster that people could identify themselves with, not me.
James McKinney: Yeah. That's incredibly powerful for all our listeners, the idea that it's not about you. I think a lot of times as entrepreneurs we go into it and because it's so personal to us, we approach it as though it is us in our messaging and everything. It is off-putting. I think one of the things that you brought up, the great point is that in all your messaging, it was trying to inspire them, awaken that person inside, so what is it that they want to see and you're producing things they want to see. Thank you for sharing that. As Grunt Style grew, now you're at end of 2012 you're at $60,000 a month. There's a lot of things that come into play there. We have capital issues, we have people issues, staffing, resourcing, all the things. Online, at this point I'm assuming you're probably evaluating is wholesale still the route I want to go or is it all online. What was going on that 12th month after when you thought about quitting?
Daniel Alarik: It's follow the winners. E-commerce was easily the biggest way to go. We also found out that having good partnerships with, if I found an online partner that had an audience that I wanted, I would figure a way to do business with you, and I would figure out a way for you to send your customers to my website so I could get their email addresses. So that was a big avenue of course.
James McKinney: Can you share one story under that umbrella right there, the partnerships?
Daniel Alarik: Absolutely.
James McKinney: I hope you are loving this episode of The Startup Story. For the month of November, we are focused on telling the stories of founders who are also veterans. For that reason, I want to remind you of two initiatives we are focusing in on this month.
The first is to visit vorticwatches.com because they have a limited edition military watch, where $500 from every resale goes directly to the Veteran Watch Maker Initiative, which is a nonprofit that trains US military vets to become watchmakers. You can learn more by visiting vorticwatches.com.
The second initiative is Socks for Heroes. On November 5th, we featured the startup story of Jim Hogan, cofounder of Socks for Heroes, and learned that he started this program after his son gave his life while serving in Afghanistan. Socks for Heroes is a program that provides new socks for our troops while they're deployed. In case you didn't know, Amazon Prime does not deliver to the outskirts of Afghanistan and our troops are responsible for providing their own socks. I'm sure you can imagine how critical it is for our troops to have clean socks. For that reason, I hope you will visit scmcsg.org to make a donation. Again, that's scmcsg.org. and if you're a company with more than 20 employees, please email them directly at firstname.lastname@example.org to see how your organization can support their mission. This is a big month with an important focus, so I hope you will participate in some way.
Now, let's get back to our episode.
James McKinney: Can you share one story under that umbrella right there, the partnerships?
Daniel Alarik: Absolutely. So actually at that January show, this is one of the things that helped spearhead our e-commerce was I think it was just a friend of a friend introduced me to someone during that show, and I think we just talked on the phone. It wasn't even in person. It was when military charities wasn't everywhere quite yet, there were still only a handful. He was a newer one but he exploded in growth on Facebook because he did something that was pretty incredible. He walked across the US a couple times to raise money for vets, and he was a vet himself. I was like oh, this is really cool.
So we're talking on the phone and he says, "I'm having a problem with my t-shirt supplier. We sent them thousands of orders and they're still way behind." I said, "Bro, give it to me, I can handle this." Of course I couldn't, but didn't matter, I'd figure out a way.
James McKinney: Figure it out.
Daniel Alarik: Yeah, and that's something you hear about sales, is say yes and figure it out. But that only works if you figure it out. So I said, "You know what, give me a shot at it, I'll take care of it. I'll make sure you're well paid," and he's like, "Well, what do you want out of it?" I said, "I want your customers. Yes, I'm getting compensated on the actual material so I'm not losing anything, and I'm only making $1 or $2 per item, which is not enough to make much money, but I'm willing to bet the people that want a piece of you will want a piece of me, and I want an opportunity to pitch them." So we did that deal. That type of partnership showed me that you know what, there's a lot of big benefit in creating partnerships that can turn out to be allies, where you're both trying to accomplish something together, and you both reap the rewards together.
James McKinney: One, I love that because that plays into everything that I love and that's the idea of just connecting people and collaborating, and serving other people as well. Obviously, there's mutual value. But do you find that we are just in a culture of skepticism when it comes to collaboration and partnerships? It's almost as if the person being approached or the brand being approached automatically comes from a position of okay, there must be something I'm not seeing if you're coming to me for this.
Daniel Alarik: I would assume so if you're not up front about it. Because we still try to set up partnerships today, and I'll tell them up front, "I'm doing this for selfish reasons, because I want your customers. I want your customer list. But I'll make sure that you're paid handsomely and my goal is I believe in this so much that I want you to be more excited about our partnership in a year from now than on the first day we sign something, because we're both going to grow together. If we can do that, then great because we're going to even do better."
So I think being upfront with it and not to say… if you just come up with arbitrary reasons like, "Oh, I just believe in you," or something like that, that sounds sneaky. People know that. They're not stupid. But if you say, "Listen, what you're doing aligns exactly with what I'm doing, and I bet our customers know that, let's do something together where it works for both."
James McKinney: I'm going to put you on the spot for one second here. If you were to think of just three key components to a successful partnership for those listening, for those that want to approach another brand for a partnership, and if you can't think of three just what are the top must haves that person listening needs to consider when approaching a brand for a partnership?
Daniel Alarik: You absolutely have to be authentic, and by authentic I mean honest or candid. You have to speak very truthfully. If you can't tell them what's in it for them and what's in it for you, and be truthful about it, it's never going to work.
The second one is it has to both work today and as well as for the whole length of the contract. Otherwise, it's not a partnership, it's just a simple transaction which is fine, but you need to be upfront about that. The last one, which is because I've had a lot of very successful partnerships upfront and several of them have collapsed within six months, 12 months, 24 months out of one simple thing, and it's ego. When people start winning, and I have been guilty of this myself, when you start winning like crazy where you're making a lot money or having a lot of social media success, very easy to drink your own Kool-Aid, to get drunk on your own success. I've seen it in my team. I've seen it with me. I've seen it with partners. And it destroys businesses. It destroys partnerships. Because then you think it is all about you, you are gifted, you are a genius and that's not the case.
James McKinney: That is awesome. Oh man, oh my goodness. Those three points are incredible. I know I'm taking those things away because I want to improve on my partnerships with other brands as well as we bring The Startup Story out there, so thank you for being candid and sharing that.
In 2012, December you were doing $60,000 a month, right? So put that out there, $720,000 for the year was your run rate. Obviously, that was assuming going forward, that's not where Grunt Style sits today. So in seven years, you've had tremendous growth. What do you point to for the key for your growth? There's a lot of brands out there that are trying to do with Grunt Style is doing. I can't remember what was taking place in 2010 or 2012 to know how competitive was the landscape in which you were trying to enter, but what do you point to as a key factor for your success and why it just took off?
Daniel Alarik: If any entrepreneur says luck is not a factor, they're lying to you. There's always luck, but luck works both ways. You're going to have good luck and bad luck. We've had plenty of both. The thing about luck is you need cash and experience to deal with good luck and bad luck. One of the good things that we had was in our favor was we were one of the first military brands to really capitalize on social media.
Everyone had the same opportunities that we did as well. We didn't invent anything. What we did is we were able to not only capitalize on it, but were able to quantify key results out of it as I want X amount of engagement to turn this into email addresses, turn that into traffic, et cetera. So we were able to do that. The biggest thing that attributes our brand success over the past let's call it six years is hiring a team that cares about the brand. That is absolutely crucial. It sounds obvious, but it's hard to do because a lot of times, I couldn't afford people that were qualified. Most of the people that I hired weren't qualified at all, but they were just highly motivated.
I thought back to my drill sergeant days, you know what, I take a fat Xbox playing, Cheetos eating kid and turn him into one of the best warriors in the world in a matter of three months. They're not the best warriors individual, they're the best on a team. So how do we assemble that team? And my thought process was as long as someone is motivated, I can teach anybody anything. That's true.
As we continue to grow it turned into more hardships because now we had more complexities in the business that does require significant amount of experience, but for the first few years of that growth, that huge growth period, it was building a team that just cared about the brand, and was just highly motivated to make an impact. They cared about the customers, they cared about our brand, they cared about cool stuff. It wasn't just me going to find customers that were like me. Now, we were hiring people that got it the same way I thought about it.
James McKinney: That's incredible. What is your employee count right now?
Daniel Alarik: We're at about 300.
James McKinney: 300 employees, over $200 million in revenue. It is unbelievable to see what has happened in such a fast period of time. We look at the last six years, there's got to be a hockey stick moment in there where it's just casual growth and something just spikes. Can you look at an event that kind of became the new normal for Grunt Style?
Daniel Alarik: Well, it starts with that whole Vegas story. That's when our growth curve started and that accelerated very rapidly up until the end of 2017. Then we still had positive growth last year. This year, we wanted to refocus and rebuild the team around profitability. During those first few years, I never took a dime of outside money, so it was all reinvesting, reinvesting, reinvesting. There's no singular event. That Vegas story starts the event, but I remember being interviewed a few years and this is still true today. They're like, "What's it like running this type of company, or what's difficult?" I said, "Everyday I wake up, I'm solving problems I've never encountered before. What makes it worth it is you get to do it with a team that you really care about."
James McKinney: That is awesome. Oh my goodness, I love every bit of that. What are the conversations like with your wife now on the business versus in 2011 when you guys were contemplating quitting?
Daniel Alarik: Well, we're glad we didn't quit. That's a positive. Now, it's more about you spent 10 years sacrificing a lot of time. How do we make it better for the family? A lot of that time, I spent many hours away from the house. Or a lot of times, because she eventually joined the team in 2013. She quit her job and became our CFO. I have pictures of my son, he had his own cot in our office because we'd be there until like 3 in the morning shipping packages, and he's there sleeping. He's got a costume or he was playing all day, whatever like that. So we grew up a lot there. So now it's more about how do we make the time that we have together worth it, spending more time with the family.
James McKinney: That is awesome. One of the things you mentioned was capital. You never took a dime, everything was reinvested. In the e-commerce space, one of the up sides to e-commerce is cash up front. So being that most of your business moved to e-commerce and online, and less about the wholesale, did that help with cash flow or is cash flow still an issue? The reason I ask that question is because a lot of entrepreneurs, when they think about product and consumer goods, that's one of the barriers is how they think through how do we fund this.
Daniel Alarik: Yeah, absolutely. To be up front too, I did take investing money this year, 2019. So the cash flow was always a problem, and it was always something I was concerned about especially if you're a bootstrapped company, that is it. You're always a day or two away from not existing anymore, right? So that's all you think about which is actually very healthy because you see a lot of new entrepreneurs, and TV and media glorifies guys coming out of college and getting investor money, and then going wild. They have no idea what they're doing. I had no idea what I was doing and I paid for it. It took me three years to get my feet off the ground and I still had a lot to learn. I'm not saying because I had to do it, you had to do it. No, it was that discipline, that forced discipline where if you don't do it right, you don't exist. That type of care of money is so vital to be successful.
I remember this time I wanted to come out with it was like a thermal long sleeve shirt, and we didn't manufacture. It was just me at the time. I couldn't manufacture anything myself. I didn't have… we run our own screen printing facility now, but I had a partner who did it. I really wanted these long sleeve shirts. I got a quote back and he's like, "Well, I could have them done, I've got a slot open. I could have it done in a week," but it was a few thousand dollars to get it done. Like oh my gosh, how am I going to pay for that? But they're so cool and I really want them. So I threw up online, on our Facebook page, I'm like, "Hey guys, what do you think?" and it went crazy like, "I'll buy right now." I'm like, "What if I knock $2 off, you buy it now, and I ship it in two weeks?" I know I didn't invent anything, but I'm like what if you could buy it at a discount as a pre-order, almost a Kickstarter.
James McKinney: Yes, that's exactly what I was thinking right there.
Daniel Alarik: So we did that, and that was the first product. It was a white or cream thermal long sleeve. That was the first product I actually made money on before I even spent a dime. It was really cool, and I'm like I've got something here. We still do preorders on almost every product today, but we don't do it for that reason. We do it because we want to have the most efficient inventory. It allowed us to sustain our business and growth. When you're trying to manage money and maybe some entrepreneurs don't have that opportunity, that's where good partnerships really, really matter. It's not always about getting the lowest price to make your goods. It's about how do you double your money as fast as possible, or how do you get to reinvest your money as fast as possible. Sometimes, you might have to pay a little bit more but get the right terms. Or get a partner who's willing to work with you. Say, "You know what, you can act as my merchant lender in this case. I know I can sell this. You're going to get the first 50% of all the revenue, I'll guarantee that up front." Sometimes you have to be creative to make it work.
James McKinney: That's awesome. That is incredible. One of the things that you mentioned earlier is that you sit with one or two veterans a week that are trying to start something up. That plays with this question I want to ask you, because things do change. You jumped on Facebook late. I think you said it was 2011 when you jumped on Facebook for the first time.
Daniel Alarik: 2011, yep.
James McKinney: Instagram was technically around at the time, but probably not on your radar at all. It didn't come on the radar for most until much later. When you think through now with the use of social media, there are so many brands that are popping up new clothing or niched in working out or niched in veterans, or whatever the case may be. There's so many brands just popping up. If you were to do Grunt Style from ground zero, you're leaving the military today in November 2019, how do you build Grunt style today?
Daniel Alarik: I don't know if this was the plan at the beginning, but it worked out the best. Not only does no one care about you, they care about themselves so keep that in mind. But you have to start off extremely niched. I started with Army infantrymen, because that's who I was. I could talk to those guys, I could speak their language. It was the easiest people to talk to because they knew that I could speak their language and cared what they cared about. With those two things in mind, I was able to sell product. It wasn't much of a sell at all, because we were already in a fraternity of a sense.
As soon as that started to saturate or grow, that expanded to everyone in the Army, and then Marine infantrymen, and then everyone in the military, and then the families that support them, and then just general patriots. So you have this bulls eye target, that slowly growing concentric circle of these marketplaces. But if I was going to start all over again, I would do something very, very similar. You start with a very, very specific niche. Don't come out and say, "Hey, we make fitness product." So what? Who cares? I can go to Target and get this stuff. But if you said, "You know what, these clothes are made for firefighters at the firehouse to work out in because they can change into their uniform when the bell goes off. That's what it's made for." Now I know exactly who to talk to and I can already speak their language, and they already have immediate interest. They still may say no, but at least I have a captive audience that can make that decision.
James McKinney: That's incredible. That is awesome. I thank you for that insight, and I know there will be plenty of listeners that are going to find tremendous value in that. But as our time comes to an end, there's two questions I ask every founder, but there's one additional one I want to ask you. You reference a conversation with your dad early on when you were like year two or year three, and your dad mentions, "We never had conversations. What's one thing you'd like to ask me?" and you asked him, or you simply said what would you do differently, or I didn't want to be you, didn't want to end up like you.
Daniel Alarik: Sounds very harsh when you're saying it back.
James McKinney: Fast forward this conversation to in 15 years when your son is trying to figure out what to do, and you're having lunch with your son to have this conversation. What do you say to him when it comes to whatever venture he wants to do, whether it be starting a business, whether it be falling in line with your business, whether it be doing something else. Whatever his venture is, what do you say to him when it comes to pursuing what he wants to do?
Daniel Alarik: One thing my dad did do very, very well was although he tried to coerce us to go into business which was a dream of his, he could be somewhat of a madman sometimes, but that actually… or fanatical dreamer, which was very encouraging to us as kids because that means nothing is off limits. You want to build your own rocket ship and go to Mars? You can do that. If you want to be a programmer or you want to be president, you can do all that. He would go from, you could show up with a hockey stick he's like, "Well great, you're playing in the NHL. Let's figure this out. You're going to be the greatest ever." You know, go from zero to 60 in a second. That's something that I think is great.
It was great for us as kids because it stimulated us to say you know what, there doesn't have to be limits that maybe normal society puts on you. I want to keep giving that to my son when he's… he's interested in exploring whether it's football or chess or whatever. Let's go get our hands dirty, let's do it together, and if you don't like it that's okay. I hear parents all the time, they're like, "Oh, my kid, you're going to play the violin for six weeks and get bored and do the piano," or whatever, or do that and then this. They make fun of their kids. You know what? They're kids. They're trying to explore what part of the universe that they like. They don't know yet. They don't have your decades of experience. I don't care if you get bored in six weeks. When you start something, follow through, of course. But you know what, that follow through may not last six months of playing piano which could be absolutely boring if you're not interested. Or maybe the greatest thing ever. But you won't know until you try. Try everything.
James McKinney: Oh my goodness, I love that. Absolutely love it. All right. Two final questions. The ones that every founder gets. The first one is about gratitude. And I ask this question because I truly believe that if we start thinking that we did this ourselves, we will isolate ourselves because of our prime ego, and that ultimately leads to our failure. You've alluded to that before when you talked about ego when it comes to partnerships, and things will just implode if that's where it comes from. But when you look back at your journey, your entire journey from childhood to now, who are all the people that you look to that have been a contributor to the success you're experiencing today, that you just have immense gratitude for?
Daniel Alarik: My dad has been an inspiration. Showing me paths that are good and paths that are bad, unbeknownst to him sometimes. But I would say hands down, Grunt Style wouldn't have existed anywhere in the format that it has if it wasn't for my wife. She has been unbelievably supportive. When you take your vows, you say for richer or poorer, sickness and health. We've been all of those. She has been fantastic. Nowhere near we would be here without it. It's not just I come home and we give high fives. No, she was our CFO for four or five years. She quit her job that was providing stable income. We hit our first million dollars, I said quit your job, I need help.
She ran all the finances because I was a financial idiot, and she let me know that too. While I was trying to learn how finances work, the vision I had an I tell her this too. I said we're like a football team. I'll run offense, I'll go get the revenue, the products or whatever like that, and you run defense. You make sure there's money left over at the end of the day, and that's exactly how we ran the company. I couldn't spend money, only she could. But then she would keep her hands off of anything marketing or whatever. The entire company, her professionalism, her kindness, her warmth, really added up to all the success that we've had. I owe everything to her.
James McKinney: oh my goodness, I love that. Again, if I could only ask one question for an interview, that would be the question I would ask every single time. I am such a believe that we are a result of all the people that have poured into us at some point in time.
So we've been talking to tens of thousands of people up until this point, and I want to bring this conversation down to just you and one of my listeners. Maybe that listener that you want to speak to is the frustrated entrepreneur who has been at this for four or five years and just not attaining success, cash flow continues to be a challenge, they're just not where they think they should be based on what they see out there in the media and the social media or what have you.
Or maybe they're the defeated entrepreneur, the entrepreneur who has tried multiple times and just keeps getting punched in the gut, and is about to just hang it up completely and stop pursuing any dreams they may have. What do you say to one of my listeners? If you were sitting down right now in the bunker there at Grunt Style headquarters just for a one on one conversation, what do you say to that one singular listener?
Daniel Alarik: What you're pursuing may not work, and you need to be okay with that. But you also need to understand that what you're doing may not actually be your dream. You have to be able to figure out what your dream really is and be able to quantify that. Nobody is born saying I want to be a tech billionaire. If that's your dream and your goal, I'm going to tell you your dream is pretty lame. If you're frustrated that you're not hitting the revenue numbers or profitability numbers that you need to hit every day and you're about to go out of business for the umpteenth time, that's okay. Hopefully you figure it out. That's hopefully going to count on you, but there is a strong chance that it won't ever work.
If that's the case, I would take a breath, take a few hours to yourself, and figure out what is it you're really trying to achieve. Is it I don't like losing so I have to make this work? Because if that's the case, I've gone down that path and it's a depressing, hard path. I've started other businesses before and failed, and lost millions of dollars. Afterwards, I mean I didn't have money before so I couldn't lose anything, because you think you've got a magic touch or because you know it could work. Just because you know it could work doesn't mean it's going to work. You have to take a breath, take a step back, and say what is it that I'm really trying to do here. Not lose or just beat the guy next to me? Because that's not a dream, and that's not a business plan.
Figure out what it is that you want. When you lay down your head for the last time in your life when you're 80 or 90 years old, and you reflect on your life, you're going to look back and say, "You know what, I went all in." and maybe you did fail, but you can look back and say I went all in and I did that. If that is what you're doing right now and you still fail, you'll still feel comfortable in that because you went all in. But if you're burning energy on something that you just don't want to lose at, you're wasting time, stop it.
James McKinney: I wish I could be sitting next to you while listening to Daniel's story. He gave some incredibly practical and actionable wisdom in how he grew Grunt Style from $1,200 to revenues exceeding $200 million. If you're driving or working out while listening to this episode, then I would encourage you to replay this episode again when you can take notes.
Daniel talked with us about the shift he made in Grunt Style's messaging when he realized that people will always care more about themselves, so Grunt Style's messaging had to speak to that perspective. Daniel shared about the value that comes in building a business without investment capital because it forces you to make decisions based on cash flow and ensure the business is profitable as you scale. He even grabbed us by the shoulders and shook us a bit in the last few minutes to help us think through why we're even pursing our business endeavors. We have an innate need to contribute to something great, and we need to be aware and tap into that.
Daniel brought some tremendous value in this episode and if you've been around The Startup Story for any length of time, then you know how much emphasis I put on the idea that entrepreneurs support other entrepreneurs. We're just coming off the heels of Veteran's Day and entering the Thanksgiving and Christmas season. Let's support Daniel by visiting gruntstyle.com and buy some of our friends and family a gift this season. Daniel mentioned that Grunt Style employs 300 people. What he didn't mention is that most of them are veterans so when you support Grunt Style, you're supporting hundreds of other veterans. Entrepreneurs support other entrepreneurs, so let's show up for Daniel and his veteran based team in a huge way, and visit gruntstyle.com.
And now for my personal ask. The Startup Story community has been so incredible about sharing our podcast with others, but we have more stories to tell and more people to reach. We too are a startup and word of mouth is everything, so please follow us on Facebook and Instagram @TheStartupStory or on Twitter @StartupStory_. If you're on LinkedIn, please search for The Startup Story and follow our company page. LinkedIn is a really powerful way to raise awareness of the show. But the most impactful way you can help us grow our audience is to leave a review on Apple Podcast. Or if you listen to the show via Spotify, then please simply share the podcast directly from your Spotify app or wherever you listen to the show.
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Daniel Alarik: You can't go anywhere. I have a question for you.
James McKinney: Oh yes, you do. Go for it.
Daniel Alarik: All right. So this is the one question I ask for the last couple years every key executive, whether you're VP level or up, you've got to answer this question. It's at the end of every interview question, and I've had people who were officers at billion dollar corporations answer this, whatever like that. If you were an animal at work, because of that animal's personality, what is that animal and why?
James McKinney: If I was an animal at work, based on that animal's personality and why?
Daniel Alarik: It's your office spirit animal. What is it?
James McKinney: That's a great question. I'm trying to think of the animal that would be classified as service, and I have to go to a service dog I guess because I'm all about serving. Not only just the office, just everywhere. I want to bring value to everybody that I interact with.
Daniel Alarik: I like that. That's good. It's a fun question. The animal never matters, it's how someone explains it. You'll have two people say lion and one person will say, "Oh, it's because I'm the king and I go around and I'll wreak havoc, and I lead the way." Then you'll have someone else say, "I'm a lion. I protect my cubs or whatever, and we go out and I make sure that they're well fed and taken care of and I protect them from harm." So it's interesting.
James McKinney: That's awesome. By service animal for all those listening, I mean the legit service animals, not the Chihuahua in the purse that gets a nice little vest to get on the airline. Let's be very clear, listeners, the legit service animals.