How does a guy who was too young to drive build a growing motorcycle company?
When he was 16, Bradley Smith saved up money to import motorcycles from China. His frustration with that experience led him to found Braaap, which designs and sells its own line of superlite motorcycles.
Braaap also sells the motocross lifestyle in his stores though t-shirts, shoes and other clothing, along side its bikes.
Brad Smith, Braaap
Brad Smith is the founder of Braaap, which designs and tests superlite motorcycles.
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Hey there, freedom fighters! My name is Andrew Warner and I am the founder of Mixergy, home of the ambitious upstart and a place where hundreds of entrepreneurs have come to tell you their stories, show you how they built their successful companies, and do it so hopefully you can build your own success story. And, from my perspective, I hope that when you do, you come back here and do an interview. So let’s talk about this interview. In this interview, I want to find out how a guy who’s too young to drive went on to build a growing motorcycle company. When he was 16, Bradley Smith saved up money to import motorcycles from China. His frustration with that experience led him to found BRAAAP, which designs and sells its own line of super-light motorcycles. BRAAAP also sells the motocross lifestyle in his stores, through T-shirts, shoes clothing, and so much more alongside the bikes. Brad, welcome, thanks for doing this.
Brad: Thank you for having me, like I said earlier, I’m a big fan, so honored to be here; I love your website and what you guys do for this.
Andrew: Thank you. What do you get out of this? Why do you listen to these interviews?
Brad: The biggest thing for me is this is a crazy journey. Building summits, turning a vision into reality: it’s a scary journey, it can be a lonely journey even though you might have family, friends, and stuff. But, it’s great to hear other people’s stories and how they’ve been through struggles, granted some are quite awesome. I really believe the fastest way to get anywhere is to learn from people who have already done what you want to do. Your website is full of people that have done many things that I want to do so that’s why, from a young guy, from when you guys first started, I think, I’ve been a listener and checking it all out. So, yeah, honored to be here.
Andrew: Thank you. So what size revenue is BRAAAP doing?
Brad: At the moment, we’re doing about 3.5 to 4 million a year. But we’ve been doing that [??]. So this year, we’ve just, literally as we speak at the moment, our warehouse is just over here, we just ordered three times more bikes than our warehouse capacity is. It’s been crazy. We’ve gone from four stores to sixteen outlets in the last twelve weeks. And they all want [??] ready for Christmas right now; it’s an exciting year ahead.
Andrew: And have the U.S. stores opened up?
Brad: No, we did the branding launch in America about two or three years ago with NASCAR driver Marcos Ambrose. We got the best riders in the world, we went to the biggest race in the world in Vegas, and we’ve been doing a lot of stuff to get some traction and leverage in the States. As of February next year, we’ve got a team moving over from Australia to America to go and replicate what we’ve done here and build dealerships and franchise stores with the lifestyle we’ve created here. We’re really excited. Andrew: Here’s what I read about you on Wikipedia: you grew up in government housing, and when you were four years old, your parents bought your first motorcycle. So, you didn’t come from wealthy background, but they wanted to make sure that this four-year-old had a motorcycle. What’s the deal with that?
Brad: [laughs] My parents grew up in government housing; I was very lucky, though, that my parents worked their butts off so that my sister and I could live a great life. We didn’t have a lot of money growing up, but I had two parents who sacrificed everything so my sister and I could live a great life. I’m lucky to have a family that supports each other, loves each other. But, it’s always been about chasing a dream, chasing your passion with my parents. My passion and dream was motocross. I was obsessed with it.
Andrew: At 4 years old?
Brad: Before I could even walk. Yeah, you know, I was obsessed with motorcycles. I remember, you know, my dad and his mates were motorcyclists and they’d meet at our house on a Sunday; they’d go off on a ride and come back Sunday night covered in mud sharing stories about what an awesome day they’d had in their adventures. I just couldn’t wait to be a part of the action, and I think they created a monster.
Andrew: I think, at 4 years old, and you might call me a wussy New Yorker, but at 4 years old I would have said, “Watch out, you might break your neck!” I just came from this atmosphere where riding motorcycles was dangerous for anyone at any age. What is motocross, by the way? For anyone that hasn’t done the research on you, which I have spent to get to know you. What is motocross?
Brad: So, motocross is basically, it depends. Motocross in the sport form of it, like the professional riding, is basically man-made tracks where we jump over jumps, up to 80 feet sometimes, and we race bikes. You might get 20 bikes on the start gate and you go at it for say 20 laps. It’s great fun. You know, the recreational you are either riding into the bush or into the woods, or into the desert even. You go riding with your friends and family. And, that’s really the passion, when you can go with your friends and family.
Andrew: All right, so you got into it, your family’s into it, you keep riding and then at some point, I guess at 16, you decide that you’re going to import your own bikes. You’re getting into business. Why? Why get into this business?
Brad: Well, I think that growing up, you know, my parents sacrificed everything so we could ride and have a great life. As I started to get older and better, I started to realize the financial pressure that motorcycling and my sport created on my family. I think my spark really started when I was probably 13 or 12 years old. Mom and dad said, “We’re going to go on a family holiday, and we’re going to incorporate into our holiday, a trip to the Australian Junior Motocross titles.” So, it’s like my big chance to go and race against the best in our country. I remember my sister and I loaded up our little white van, we had a beat up van. You know, we went off on an adventure. It was a 20 hour drive and a boat ride across the Bass Strait, the water, to get to this race. Then, we had the time of our lives and as we got along having fun, I started to see how much pressure mom and dad were on financially just to get us to the event. We drive into the race, there are 800 kids that race at the Australian Junior Motocross titles. And, we drive in and park our little white econovan next to a kid that had a semi-truck. A kid who had 5 dirt bikes, all brand new, he had a mechanic, he had a coach, he had a chef.
This kid’s dad even had a helicopter in the paddock next door. I’m like, “Freaking hell.” I’m walking through the pits with my mom, just drooling over all this bling. I say to my mom. “How the hell do these people have what they have?” Because, I knew that my parents couldn’t physically work an extra hour in the day. They busted their guts just so we could get there, yet the people parked next to us seem to materially have it all, and not under any of the pressure my parents were in. Mom’s response was, “These people don’t have what they have because they work harder than us. These people have what they have because they work smarter than us.” I was like, “Damn mom, that’s a good one.”
Andrew: And, that’s when you decided?
Brad: It became a framework for my life really. I decided then and there that I wanted to work harder at being smarter. I wanted to be in a position to make a difference, starting with my family. I wanted to turn my passion for motocross into my pathway, and I got home and read books and found other entrepreneurs websites, like yours. Anything I could do to get myself educated, and find out what I could do to prepare my passion for motocross into my profession, into my pathway and make a difference.
Andrew: What are some of the books that helped you think differently about the way to get there? To get to the place where you have a helicopter, multiple motorcycles, and so on?
Brad: There are so many. My bookcase is chockfull. I suppose everyone’s first book is, “Rich Dad – Poor Dad,” that’s a great book. I’m a huge fan of Tony Robbins. I’ve been part of his Platinum Partnership and followed him around the country. I’m a huge fan of all his material. Keith Cunningham, I’m a huge fan of all his material. So, there are so many books like that, and a lot of biography stuff. Just reading about your idols, and people like that and videos of interviews of people who are not certainly famous, but on the Grand. They’re on the Grand, sweating it out, making it happen and within the dream that I wanted to live.
Andrew: Where are you? What country are you in today as we do this interview?
Speaker: I’m in Melbourne, Australia.
Andrew: OK. You know, what I found about Australians, is that they don’t feel like they need to be politically correct about their desire to get stuff, to build something. Like in the U.S. you say, “I wanted to build this big company, but I also wanted to give back, and I care about family.” You might want to do all those things, but it’s OK to say, “I want to build something big.” It’s OK to say, “I don’t want to have to struggle; I don’t want to have to work harder my whole life. I want to work smarter.” Is that a cultural thing, or am I just reading too much into the few Australian interviews I’ve done?
Brad: No, I think you’re reading too much into it. I think everywhere you go, it’s, I don’t know if they call it what they have over there. But in Australia, we even have a name for it, “Tall Poppy Syndrome.” And that is that it’s, you know, they want to cut you down if you want to push forward. But I’ve never been ashamed to say, “I just want to do something big, and not for anyone just other than to prove to myself I can do it.” I think that if you’re going to do it, do it big. And, you know, we’ve definitely bitten off more than we can chew, and chewed like mad to make this happen, and continue to, as well. I think that you’ve got to continue to stretch yourself, and grow, and push, and have a bigger vision.
Andrew: What is this syndrome called?
Brad: Tall Poppy Syndrome.
Andrew: Tall Poppy Syndrome.
Andrew: You’ve said that you definitely bit off more than you can chew. Do you remember one time when you especially were a little scared because you went for too much?
Brad: Uh, man, there are so many. I’ll tell you right now, it’s the best one: you know, I just ordered three times — you know, last year, I just ordered the same amount of bikes I sold in, like 12 months, I ordered to arrive [laughs] this week, and for a whole year’s worth of bikes arrived in one week. So, our warehouse is three times its capacity. I’ve literally got bikes in my office, like, stacked to the roof. It’s unbelievable.
And the reason why is because we came up with a new strategy. We though, “If we’re going to do it, let’s push it hard. Let’s push it this time of year.” And I had to get support from the bank, support from other private investors, to raise the capital. It was a huge risk, and, you know, if I didn’t sell the shit that I’d ordered, I would . . . no, I literally put all our cards on the table. And I’m stoked. We’ve gone from four outlets to 16 outlets in Australia, (?) the last couple . . .
Andrew: When will we know if this bet that you made pays off? If the bet to have, in one week, as many bites as you used to have in 12 months.
Andrew: When will we know that it paid off?
Brad: We know it now. Because I ordered the bikes, it takes us three months to manufacture. So, I ordered the bikes, had to pay for them three months ago. So that was really, that was the bet. And, you know, the bikes have arrived in the last couple of weeks, and we’ve sold them. So, we’ve started to sell them, and they, like, we have 150 bikes going out this week, so, tomorrow. So . . .
Andrew: I see.
Brad: So the bet’s definitely paid off. That’s a huge one. But it’s been stories like that, that every step of the way, you’ve had to take risks. You know, we started a finance company two years ago, because 80 percent of our product is sold on our $3/day payment plans. But in Australia, when the JFC stuff started about four years ago, our payment plan partners pulled out of the market, which meant that our biggest product, our finance, was pulled from our store.
So I set about starting our own. And, you know, I started a finance company with no money. [laughs] And that was a huge risk. And now it’s partnered with private equity, and we’ve been very lucky to move forwards.
Andrew: I’m going to continue with the narrative, but now I think I understand why you finally sat down for an interview with me today.
Andrew: I’m looking at my… I just typed in your domain into Gmail, and I see in my inbox, the first time that I emailed you was about, almost exactly a year ago, to the day.
Brad: That is . . .
Andrew: And you’ve always been nice, you’ve said, “Yes, we’ll do the interview. No, you and your people said I don’t need any pre-interview work. I’m ready to roll.”
Andrew: But there’s always been something that’s come up. And I guess, is it now that you can take a little bit of a breath, because you know where the holiday season’s going to end up for you? (?)
Brad: I’d probably say no. I think that it’s probably as crazy as ever here, and I think that it always will be, as well. It’s part of a growing business. You’ve got to be jumping on opportunities, and, you know, when the iron’s tight, you stir right. And I think that’s why I’ve been the hardest man in the world to track down over the last 12 months.
Brad: It’s really a reflection of our position in our business, and maybe the position in my life, as well, and that is, we have to be opportunistic at the moment, because we’re an emerging brand in an industry that has some pretty established competitors. And it feels pretty good to be outselling them, but those guys are starting to flex their muscles, so we’re pushing them around as much as we can, and moving and shaking with them.
So it’s a crazy time to be involved in (?), and it’s an exciting time in the economy, in the world, to be involved in an emerging business. So, [laughs] it’s all hands on deck at the moment.
Andrew: [laughs] I think this is why Lenny Ramirez in the audience suggested and urged me to interview. He said, “This guy’s badass! I like the way he talks about business! Get him on!” Lenny, he is on.
Andrew: All right. So, going back, you’re 16 years old, you decide that you’re going to establish your own little business. Now, you need a grub stake. Your parents aren’t going to just lend you thousands of dollars to go start this business. You have to go get it. Where do you get the money?
Brad: You know, after that trip to the Australian (?) motocross trials, where I became hungry as hell to make a difference, I knew that the first thing that I was going to need if I was going to, you know, if an opportunity came, I wanted to be able to pounce on it. Step One was, I was going to need some money. So, I mowed lawns for all the old ladies in the street, and, you know, that was awesome, because they paid in food and money. [laughs] I was . . .
Andrew: What was — what did you do?
Brad: I mowed lawns, like, the grass.
Andrew: Oh, mowed lawns. And people would pay you food and money. OK.
Brad: Yeah. [laughs] Yeah, so that was great. I wobbled signs for Domino’s Pizza on the corner.
Andrew: Wobbled meaning you’re just shaking it so people noticed the Dominoes sign. OK, human billboard.
Brad: For six dollars an hour.
Brad: I started an online business. This was over 12 years now where I’d go around to all the stores and collect all the movie posters. [Phone ringing] Sorry my phone’s ringing, classy. I went around to all the stores and collected movie posters and would sell them on eBay. I created a few other products where I’d just import/sell stuff, just start some little entrepreneurial things to save up as much money as I could because I wanted to be able to pounce when opportunity came.
Andrew: What was the opportunity that you saw that you had to pounce on?
Brad: Well the opportunity I saw in America from Australia by videos and magazines and stuff. My racing adults[??] who race 450cc and 250cc motorcycles started to ride these play bikes, which were kid’s bikes hotted up for fun, but they are spending 12 grand on the bikes. I was like man that is our opportunity to turn motorcycle into a more fun, accessible and affordable sport. Now as a professional rider riding 250s, you go to the gym every day, you ride your bike every day. Your bike is worth at least $15,000 plus maintenance, plus travel. On a superlight bike, I got a $3,000 bike that I go camping with and my sister comes. At the same time, three weeks later I’ll be in Vegas racing the world title. It’s literally fun and affordable. That was my opportunity and that’s what I wanted to create was an accessible, affordable, and competitive motorcycle.
Andrew: So it’s a $3,000 bike, but at the time it was meant for kids not adults. You said I think if there’s $3,000 bike out there that’s meant for kids, I can build a $3,000 bike for adults and they can have fun. You were a pro by that time and said if I’m a pro and I enjoy this then everyone else is going to enjoy it. It’s not going to feel like kid’s play to them.
Brad: Yeah, I was racing A-grade Motocross so we knew what we were going to break. But, we also knew that we needed to make it affordable, so that’s exactly right. We wanted to build a bike that was ready to go. These guys were customizing, building bikes and we wanted to build a production version of that. We now have seven models.
Andrew: Alright, so you now have this idea. You see the opportunity. You have a little bit of cash to go do this. I said you were going to outsource this to China.
Andrew: How do you know at the time in who China is going to make the motorcycle for you.
Brad: Man I was so naive. When I was 16, I took all the money I had spent three years saving up. Got my dad to sign the import approval because I was too young and sent all my money to company on the other side of the world. A company I still can’t pronounce the bloody name of. I waited eight weeks for those bikes to turn up. The day those bikes turned up to Australia is still to this day the toughest day I’ve had in business because the ten bikes that I had ordered certainly weren’t the ten bikes that showed up. So I had been ripped off. It took me a nearly a year to find an owner for these bikes that could only be sold to kids. I wanted to sell bikes to adults. By the time I built websites, made the trade stalls, all the stuff you do, I had certainly loss my money. I had lost a year, but I hadn’t lost my passion and my vision. I decided if I was going to make this happen, as soon as I turned 18 I needed to get my butt on a plane and get to China and find a manufacturing plant who would build my dream bike.
Like I said, I was so naive. I had never been outside of Australia. I had never been outside of Tasmania without my family and I sure as hell couldn’t speak Chinese. I went over there and I hired an interpreter and we went around for two weeks. In the first twelve days we went to over 50 motorcycle manufacturing plants. Every single one of them laughed me out of the office because I was an 18 year old kid with no money, no experience, no engineering ability, and no distribution channel. On paper, I had nothing to offer and no wonder they laughed me out of there office. I did happen to find, in the last couple of days, a manufacturing plant who did believe in my vision; a manufacturing plant that could see that we could add some value. I significantly underestimated how much it costs to manufacture motorcycles.
Andrew: Let me dig deeper into everything you’ve said so far. First of all, how much money did you save up that you sent to China for these bikes?
Brad: The first lot was probably only 15 grand or something.
Andrew: 15 grand gets you about ten bikes?
Brad: That was back then. That was those first few like cheap shifty ones that ripped me off.
Andrew: What do you mean by ripped you off? What was wrong with them? Was there just one wheel per bike? Was it something else?
Brad: That would have been better.
Andrew: [ laughs]
Brad: Well basically we’d done everything, the specs, engineering checks, everything defined over the Internet. I signed off that this is the product that I want and then they sent me a different product. So I lost like 15 or 20 grand.
Andrew: I see. How were you planning on selling it? The same way that you ended up selling it in stores, online and so on?
Brad: Not really because in (?) I could sell to kids but I couldn’t build my brand on the (?) so I had to sell them sort of privately really.
Andrew: Alright, and then you go to China. How do you even know where to go and find a single manufacturer let along a dozen manufacturers?
Brad: Well, that was a massive challenge because I didn’t know. I just literally went to China.
Andrew: You said I’m going to China, I’ll find an interpreter and then the interpreter will tell me where the manufacturers are.
Brad: Basically yeah, that’s exactly what happened. But I didn’t have that plan at the time. I thought, I get my butt to China and we work shit out once we get to China.
Andrew: Wow, all right. And then there’s one person that said I believe in this vision. What’s the vision that you had when you went out there to work shit out?
Brad: Well, the vision was to build a motorcycle that was production, that could compare with these customized American built bikes. And to build a distribution channel and branding how I wanted to do it and to build a community around that brand. And the biggest thing was I learned so much, I’d been knocked back over 50 times. You learn a (?) manufacture and what those people want. And I learned that the biggest thing I wanted was a guarantee on how many units I was going to sell. So I ended up managing quite a cool deal where I didn’t have to have any capital up front but I had to sell a significant amount of motor cycles and had to pay a significant premium per bike. So that guy who believed in me made quite a good chunk because he basically financed me to the deal. But I had to keep my promise on selling a significant amount of bikes and at the time I made a promise I did not know how I was going to keep and that was to go home and work at how to sell those bikes.
Andrew: All right. You get the bikes; now it’s time to learn how to sell them. How did you sell them?
Brad: Well, I signed up dealers right across the country. And I was so excited you know, the vision was starting to come, starting.
Andrew: You’re talking about a guy sitting in his bedroom, his parent’s house, calling up local outlets and saying, hey I’ve got these small bikes, I’ll give you a good price, you should carry them.
Brad: Yeah, basically. I called up magazines, got magazines to do edits on them, went and did some like shoot outs against other bikes. I did whatever the hell I could to create hype and create perception that I wasn’t in my bedroom and I was a significant company. And that’s what happened, I got people to believe in me, had deals with selling a lot of bikes. But about a year ticked over and I realized that my vision was to create a brand that had a meaning, that created community, that impacted people. And at the time I was fresh to business, our brand was fresh, we hadn’t really discovered who we were as a brand, and we had dealers around the country we didn’t have a lot of control. And at that time the dealers didn’t really care about making a difference and I had no way of controlling the customer relationship. So I decided if I was going to make a difference I needed to open up my own retail store. So I bought back all the bikes from right across the country and opened up one store in one (?) in Tazmania which has a population of 100,000 people. And it was unbelievable. I had so many challenges when we opened that first store.
Andrew: You bought them back because the bikes didn’t sell?
Brad: No, they were selling great, but the dealers wouldn’t be dealers while I was going to go open up my own retail network. Because they believed we’d be competing against each other.
Andrew: I see, so you at that point had to say, where am I going as an entrepreneur? Am I going to be the guy who supplies these other people, or am I going to be the guy who creates the center of the purchasing experience and really make an experience out of it?
Brad: Exactly. exactly.
Andrew: One more question. BRAAAP, what does BRAAAP mean, BRAAAP with three a’s?
Brad: Ah yeah, so it’s BRAAAP.
Andrew: I should say that actually. Every video that I see it’s BRAAAP.
Brad: That’s much better.
Andrew: You do a lot of videos online and the way that you say the brand name does stick in my head. Alright, so, BRAAAP, what does it mean?
Brad: What was that, I’m sorry?
Andrew: Where did you come up with the name?
Brad: That was my nickname for a long time. You know growing up apparently you couldn’t have a conversation with me without going BRAAAP. So that was my nickname and (?) and a sort of action spot term, so I thought that’s very fitting.
Andrew: All right. You get your own store now in a place that has 100,000 people. I think my college had 100,000 people by the way. So pretty small town, how do you? Well not small but small relative to my place in New York City. How do you get customers in the door?
Brad: Well, the first challenge I had was that, and I didn’t anticipate was that obviously I needed to create lifestyle so I needed to have other products, fashion, helmets, protective gears, everything else, parts. And there was a man who owned six motorcycles stores in Tasmania at the time and he said to all the motorcycle supporters in the industry if you support the kid I’ll pull my accounts. So no supplier in our industry was willing to take a risk on me.
Andrew: Supply shirts and hats.
Brad: Protective gear.
Brad: Everything you need to look like a motorbike shop.
Interviewer: That guy had that much power?
Brad: Yeah, well, there’s only, probably in our state, there’s probably 12 motorcycle stores. Here are the majority of them.
Interviewer: I see.
Brad: There’s to be a risk. That was a huge challenge. I remember the day I rented the building. 800 square meters. Dead empty. I get these phone calls from all these suppliers to say, sorry, mate, we can’t support you. We don’t believe in your vision. That’s a tough phone call to get, a tough group of calls. I remember [sneaking in back of them], about eight months later they came in because we were outselling every store in our state. They all came back [??]. It’s pretty cool. But that’s another story.
Interviewer: I was coming back to ask you about that story. What do you do now? You can’t sell helmets and all the other stuff.
Brad: I find someone in a different state who does sell them. I buy every product at retail. I put them all on the shelf and then ring up every rep and say, mate, just come have a chat to me. I understand you can’t supply me. Just come have a chat. Each rep walks into my store. Holy shit, there’s my brand there, bigger wall than the store around the corner. Our store looks brilliant. We’re selling a lot of [blocks] outselling everyone. and eventually they have to come around. I didn’t make any money to start with but I pissed a lot of people off.
Interviewer: They weren’t pissed that you were selling their stuff and say, hey, you know what, if you’re basically going to pirate my stuff and sell it in your store, go behind my back, I don’t want to deal with you?
Brad: Yeah, that happened quite a lot.
Interviewer: I see, but they had no choice because you were selling so much that they said, all right, we have to deal with this guy. Now let’s get to how you …
Brad: Well, the brands wanted to be in our store from the start but our competitors didn’t want [it to be there] so the competitors were flexing their muscle. I said that, basically my thinking was, I want the supplier on my side but I’ll take the heat. I’ll just go and buy it retail. Anyone can buy helmets retail. I did that, put them on the shelf, sold them at the same price and I took all the heat for… Yeah. Pretty cool.
Interviewer: Gotcha. All right, so how did you get people to come in the door and buy so many bikes, so many helmets, so much of everything that you can actually bring these suppliers along?
Brad: Well, the first thing was I needed to make it affordable. That was my number 1 goal. We developed relationships with payment plan companies and we marketed really heavily. Not so much paid marketing but as much pay hour, as much events, as much marketing as we could do with our budget to promote $3 a day. You can get a motorcycle for $3 a day.
Interviewer: Three bucks a day.
Brad: Yeah. $21 a week.
Interviewer: I see. Actually today when I went on your website, it said, I thought, 14 bucks.
Brad: Yeah. Yeah. Probably, yeah, different model.
Interviewer: [SS] How do you end up giving people $3 a day bikes?
Brad: Oh, well, they pay interest. Don’t get me wrong, but the benefit for them is they can have an impulse purchase. They can get it right now and, who notices $21 a week. I mean it costs more to go and have a drink at the bar these days. It’s easy and it’s accessible. The reason we can do it is we’re backed by private investors and now a huge private equity company.
Interviewer: Back then were you backed by private investors?
Brad: No, it was a separate company back then. I was selling someone else’s product back then.
Interviewer: And getting the few bucks a week, the $21 a week deal. Who backed that that you were able to do it? How did you get a financing company to help you?
Brad: Well, to start with, there was enough, like JA did it and they paid me up front. I was basically initiating all their finance for them so they were loving it. Then we got out of the motorcycle market when the GFC hit and they had to tighten up. That’s when we created our own finance company. I got some American investors. I got some stuff like that. Some local investors here to get started. Then 12 to 18 months later, the private equity firm took it over and I no longer run that part of the business. It’s owners to shareholders.
Interviewer: And GFC, you mean the global financial crisis, when that hit, that’s when these guys backed out of motorcycle financing?
Brad: Yeah. Yeah.
Interviewer: OK. All right. What else do we want to, oh, that’s promotion. You did all kinds of promotion. What worked especially well?
Brad: Our payout is unbelievable. People hearing your story and sharing your story so payout has been unbelievable for us. Winning the biggest races in the world as a production block has been… We only did that in May so that’s been a huge payout for us this year. To tell the truth, nothing beats getting …. YouTube’s been huge for us to create desire and people wanting to come into our stores, but as of conversion. Getting butts on seats. Nothing beats teaching people how to ride a motorcycle. I don’t care you are. If you’re from New York City and you’re worried about [??] and you come out and twist the throttle, I guarantee you’ll have a grin from ear to ear and you want a motorcycle. That’s what we do. We teach hundreds of people how to ride every year.
Interviewer: Ah, you teach them. You say, hey, you always wanted to learn how to ride. Come on in here. Do you charge for that?
Brad: No, it’s 100% free.
Interviewer: 100% free. I see. Then once I learn, I only have to pay a few bucks a day. Why wouldn’t I want one? I take it and I throw it, even in my apartment I can store it. [SS]
Brad: Exactly. We’ll start off quiet.
Interviewer: What about the, I see a lot of new entrepreneurs, they talk in very businessy terms, or what they imagine are businessy terms. You’ve got t-shirts on your site that give the finger. You’re a respectable entrepreneur. Was there ever a time, when you were acting, instead of being?
Brad: Yeah. I mean right now, I still wear my flannel night shirt to the property equity office, and they laugh at me every time. That’s great. There was a time, and I think the number one reason I do that is, it’s actually quite tactful. The reason is you’ve got to be real. You’ll never see me wear a suit to a business meeting, you’ll never see me wear a colored shirt buttoned up to a business meeting, because it’s not who I am. I did do that once, I was about 20 years old. I needed to refinance to open up a couple of retail outlets. I had an advisory team who cost me way too much money, and they said, “Brad, you’re going to a bank, the biggest bank in Australia. You’re going to meet some of the highest guys up at the bank. You need to look respectable. Here’s a suit, wear the suit”. Why? I can’t wear the suit, see if you can get the deal. Next week later, I called up another bank, went there in my flannel night shirt, and got the deal. I was like man, that’s a lesson to heart, you’ve got to be yourself . . .
Andrew: Why? What’s the difference? Were you acting differently when you were wearing the suit then when you were wearing your flannel?
Brad: Maybe, it’s more of a metaphor than an action. Maybe the suit didn’t affect the deal, but, I just think that you have to . . . People can see through a nice suit, and shining it up . . .
Andrew: They can spot a phony.
Brad: Yeah, exactly.
Andrew: Before I move on to this question, you mentioned PR. Did you have a PR company, or were you doing all this stuff yourself?
Brad: To start with, no, we did it all ourselves. Over the years (________) used, to pay our companies. I don’t have one at the moment, no. I think that every great, I’m a big fan of Napoleon. He talks about, you can’t blow your own. You get someone else to scream your story from the rooftops. I’m a huge believer in that, and I’m a huge believer in creating perception. That’s why you see all our awards, all of our stuff, all the length factor really. That builds credibility in your industry and in your local community. I would encourage any young entrepreneur that want to do this to do exactly that. It’s uncomfortable to start with, I’m not the sort of the person who likes to go do that initially, but, it sells a lot of blocks . . .
Andrew: You mean self-promotion does?
Brad: Yeah, exactly. But you get someone else to do it, and that’s why we started this payout thing. If it’s not a payout company, if I do it myself, I make sure it looks like it’s coming from somewhere else in our company.
Andrew: I see. Another e-mail address that sends it out, I see.
Brad: Yeah, not that I have to do that too much now, but when I first started, definitely. I pretended I was someone else.
Andrew: Give me an example of who you pretended you were someone else with. You don’t have to say the name, but, how did you get something done that way?
Brad: Not so much pretend, like I would get say, Sheraton in marketing. I would say look, “I have a great payout opportunity here, I’ve written up the releases. Here’s what I want you to do, I want you to put it together, get a letter head on it, and sign off on it, and send it out for me. To distribute, so shoot, just to distribute it, but it was really, just came from an idea we had, myself.
Andrew: Is Lenny Ramirez secretly working for you, and you said, “Here look, tell Andrew I’m a bad-ass entrepreneur we should have on”.
Brad: Actually Lenny, Lenny did some Facebook stuff for us. Ask him if he did some Facebook stuff for us one day? I think . . .
Andrew: I thought he didn’t know you. OK.
Brad: Maybe he did.
Andrew: He might have. He didn’t say he didn’t know you or anything. He said, “Hey, look, this guy is bad-ass. I think you guys should interview him”. He’s suggested good interviews before . . .
Brad: Actually, that’s not a set up though. Anyway, I’ll have to give him (________).
Andrew: I don’t know if I’m allowed to say who it is, but I know that this has happened with a few other entrepreneurs. One entrepreneur specifically told me, that after we built a friendship, that he had him employee e-mail me and ask me, but, basically it was him. He said, “Look, if I say Andrew you should interview me, you come off as arrogant, you might start looking into me”. But if an employee likes her boss so much that she wants him interviewed by this site that she loves listening to, then that adds a lot more credibility to the request.
Brad: So true, so true.
Andrew: All right. Funding, again this is from Wikipedia. Frankly, between you and me, it feels to me like Wikipedia has a copy and paste from your about page.
Brad: Yeah. I haven’t been on there for a while, it sounds like there’s some in-factual stuff on there, I have to check it out.
Andrew: Oh really?
Brad: Yeah. It said at 17 I started. It said some other bits and pieces.
Andrew: You know what? That could have been me copying and pasting wrong. Here’s the next thing, that you competed in an entrepreneur’s event, or you went to an entrepreneur’s event, and there you got Commonwealth Bank to fund you. Is there a story around that?
Brad: So, what happened was in Australia, the Australian Young One of the Year Awards, they select competence and [??] and those things, and they put you in and then they get a judging panel in. You’ve got to go and get interviewed, and they just interview about your story and stuff. They chose a young Australian of the Year, and I won that two or three times in a row. That’s one is sponsored by the Commonwealth Bank. And while I was there making the Commonwealth Bank and that kind of thing, I got to know one or two of the guides quite well. And, it’s a funny story with that finance company: what I ended up doing was I found out, obviously, the pecking order at the Commonwealth Bank, and when I wanted to establish my finance company, I called the guy from the Commonwealth Bank, literally every week, saying I needed to borrow this many million, I needed to borrow this, I need to borrow this. And he’s like, “Brad, you know that I can’t lend you that much money based on security; you know that I’m not going to do it to start a finance company in competition to what we do. Yeah, this is not going to happen.”
So after a year of calling like literally every week, you know, I’d make it fun, crack a joke, [??], but he knew I was calling. I said, “Look, you can’t help me, but you must know someone who can.” And he said, “Look, I actually do. What I’ll do is I’ll take you around to all the private equity companies in Melbourne, and I’ll introduce you, and who knows what will happen?” And that was so [??] to me. He sat in on the meeting and introduced me, and that’s the best testimony you can get is when the bank manager and one of the COOs of the Commonwealth Bank sits next to you and says you should support these kids. That’s pretty cool.
Andrew: So, a lot of people are going to listen to that and they’re going to take away the persistence. They’re going to say, “Every week I’m going to call this one person who I want to do business with. But what they’re going to miss is the relationship building, the charm, the likeability that you communicated on those calls; give them some advice the way that Robert Kiyosaki… Is it Robert Kiyosaki of Rich Dad, Poor Dad?
Brad: Yeah. Yeah.
Andrew: … all those authors. It is. So, give them the kind of advice that you would have wanted, that you look for about how to build those relationships and not just be a pest who calls every week.
Brad: Wait now, you’ve got to remember: these people are still people. So, I always have one rule. Every time that I make a call when I’m know I’m being persistent and this could be a painful call, I have to add some value. Now, value to a guy who’s sitting in an office in city, wears a suit, he’s probably not loving his job, value could literally be putting a smile on his face. So I made it a joke and that was, with these guys, who are new or probably more educated than me, smarter than me, and, career- wise, were far more advanced than I was at the time, my job was that I wanted to embrace them, make them feel like they were a part of my journey, helping something great. So, I needed to make sure they knew my story and believed in my vision. Once I knew that, it was just about making sure I was fun, genuine but funny, each time I spoke to him. Another example of that is, as well, I had a property investor who I didn’t end up doing any business with, but I really wanted to meet this guy. And he was impossible to get ahold of. So I called his office at like 5:30 in the afternoon one day, and said to secretary, “Look, I just got off the phone from this person, could you just bang me through please?” Like just pretended like I was in a fluster and had been cut off accidentally: put me straight through, got there, then I told him the story and he pissed himself laughing, and we’ve had a great relationship ever since.
Andrew: Tell them the story of how you got through to him.
Brad: Yeah, I said, “Mate, you are the most impossible person to get through to, I’ll tell you how I got to you.” You’ve got be genuine. You always have to be genuine, you always have to have a little bit of fun, but you need people to believe in your vision. That would be my three points.
Andrew: How good would it be if someone who wanted to meet you called you up and said “I was just on the phone with Bradley Smith, and we just got disconnected. Could you please reconnect me?” And then you end up getting a call that starts off with that story.
Brad: It’s happened a few times.
Andrew: Is that right? It’s good.
Brad: I love it. I’m here to help, anyone who I can help. I’m a [??}, I’m down on the ground as well swinging the tools.
Andrew: You’re swinging the tools, but you’re also built a lot. Did you get a chance yet to enjoy some of this success? What have you done with it?
Brad: For me, financial-wise, I’ve invested every dollar back into our growth. I’m 25, I’m very early in my growth curve and we have a lot that we want to achieve still. So, financially, we’ve invested a lot into finance companies, this dealership thing, America, New Zealand, some stuff in different countries as well. So that’s our growth plan. But, I’ve been very lucky in that I love growth, investment growth. And I got to travel around and follow Tony Robins for a whole year around the world. Oh really, we went to Fiji, Egypt, Israel, America, Australia, it was unbelievable, learning from one of the best in the world. And I’ve been very lucky to learn from and be around some of my greatest mentors and that’s probably one of the … [SS] …
Andrew: You follow Tony Robins around the country to all these different places that you talked about?
Andrew: You paid to follow him around?
Brad: Yeah, yeah.
Andrew: How much?
Brad: I probably dropped about $120,000.
Andrew: $120,000. And what do you get for that?
Brad: Well that included travel and flights and stuff. You can join his Platinum partnership for around $65,000. And you get to go to different places. I got to go snowboarding with Tony for four mornings in a row. Myself, Tony, and one of my other friends went snowboarding for two hours each for three mornings, and to spend six hours with [??] I don’t know what his hourly rate is but it would be significantly more than what I paid and that’s an unbelievable relationship to build. So, it was unbelievable.
Andrew: How soon before somebody pays that kind of money to go snowboarding with you? And He’s telling his friends, “Hey, you know what I paid?” Do you feel that way, do you want that?
Brad: Not really, that’s not why I do this. I feel very blessed if I can even [???] in my speaking and different stuff that I do, if I can help people on edge any because I know how hard it has been and it continues to be for myself
Andrew: What’s the hardest part? So far it feels like everything’s fun. The guy gets to wear the clothes he wants, he gets to curse, he gets to ride motorcycles, he gets to come up with crazy schemes like calling up a banker and pretending to be out of breath. Life seems good. Take us actually, otherwise you know what? This will not feel like a human interview if all I have is this fun part. Give me the worst part.
Brad: It is. Oh I mean it’s so true you get to do so many great things. Don’t get me wrong, you really do. But in the back of your mind it’s like being a professional athlete. You never arrive. You’re always on a journey looking for something more. You’re always risking – I mean look at right now, we just ordered how many times more stock than we sold in a whole year. And our warehouse is three times over capacity. You know, financially you’re taking a huge risk. You’ve got people’s lives at stake. Not only the people who have believed in you and put their butt’s on the line, but my parents who have invested their whole lives who have given me everything they can time-wise and risk-wise as well. There’s so much at stake. The kids and all the different stuff that we pay because we’re good at what we do. If I make a mistake all of that goes so there’s quite a bit of pressure, but I handle that pretty well. It also the time. that’s the one area in my life that I’m facing…
Andrew: Not enough time. But, we all have not enough time, and we also all have the kind of pressure that you just described, but most people wouldn’t be able to say what you said which is, “I handled that pretty well.” How do you handle the pressure of knowing when you go to bed, after you buy this 12 months’ worth of inventory for a week worth of sales, or any big risk like that. When you go to bed going, “I could lose it all! I was on top of the world, I did a Mixergy interview and now I could be right back on the bottom dreaming, I don’t know what, dreaming of living a normal life, seriously how do you put that aside so you can focus on what you want to do, and not on what you are scared will happen?
Brad: Well I think the first thing is that we’ve done so much preparation and so much work. We haven’t just taken a punk, because obviously it’s a punk because the money’s not even in the bank, well it is now but it wasn’t at the time. We’ve done all the research; we’ve done all the preparation we can. We’re hungry as hell, we’re happy to work as much as we have to, we can handle pressure, we push hard and we believe that we’re the best at what we do. So, if the shit hits the fan which it’s probably going to at times and it has done even with this load that we’ve just done we know we’re willing to roll up our sleeves and get down to work, but I suppose at some point you have to believe you’ve got it, and I believe we really are. We’re blessed and got it, and lucky to have great people around us and been very blessed.
Andrew: When was a time when you were most freaked out, when you woke up in the middle of the night and you said, “Oh my God, this is too far?”
Brad: It’s probably only happened to me two or three times, really. And one of those times was about three Christmases ago. We did a lot of work to sell a lot of bikes, told a lot of kids to ride, and people to ride motorcycles through the year, and a lot of them said look, we want bikes for our kids but for Christmas so we’re going to come pick up our bikes on the 28th of December, and obviously they don’t pay for the bikes until the 28th of December. So I ordered all of these bikes- containers full of motorcycles to arrive on the 1st of December so I had a couple of weeks leeway, because I thought what could go wrong? Shipping could happen, we could be two weeks delayed. You know cross your t’s and dot your i’s.
I didn’t anticipate for a manufacturing fault where one of our steps in our manufacturing process in our manufacturing plant got missed which was our heat treatment. Now, any other company would have let it go through, but when we did our metal testing and quality control in Australia, one of our guys picked it up. I was like man, we’ve got, I can’t remember how many it was maybe 120 motorcycles which at the times was a significant amount, we’ve got 120 motorcycles sitting in Australia in our warehouse the kids have got to pick up in three weeks for Christmas, what are we going to do? And that was pretty stressful because it takes three months to manufacture a motorcycle.
Andrew: So what do you do then?
Brad: Well, we scrambled. We ended up doing our full assembly in Australia. We air freighted frames in, because there was a frame that needed to be heat treated. We air freighted containers in which, that cost a shitload of money so we lost a lot of money on it, but we created a lot of happy customers. And I suppose looking back that’s all you’ve got to do really, you’ve got to live for the future when you’re building a brand and a business that you’d want to be sustainable.
Andrew: You know what I blew past that Tony Robbins thing. You spent money on it, not just because it’s fun and not just because you could and you’re a fan. You spent money because you wanted to grow
Andrew: How did you grow in that year that you were a part of that program?
Brad: Oh it’s unbelievable. Like I said before I’m a huge believer in proximity is power and actually putting that into action. I mean I have a list of people in my think tank and of people who I need to meet and spend time with. And it’s some of those people’s names that you’re familiar with, some of the people who, local people who I think do a great job. And I’ll get them to the think tank and I’ll pick their brains to (?) learn from them. And for me learning from Tony Robbins was going to be worth the money in itself, but I knew there were 50 other people in that group who’d paid the same amount of money I had paid and I was the youngest there by maybe 10 years, 15 years. And most of these guys had gone and done what I wanted to do, now they’d retire and doing the Tony Robbins thing to enjoy life. I was the hungry guy who was going there to try and make something out of it. So it was unbelievable to be around those people.
I learned so much from people who’d built businesses way more than 100 million dollars. I remember sitting at my dinner table and one guy told me he’d done a deal where the business was worth over a billion dollars. I’m like just (?) a dinner and lunch from these guys and ask these people a question and then have five or six entrepreneurs who are playing the game at a significant level help me, and then call me up two weeks later and see how it had gone. And if I hadn’t put into action what that advice they’d given me I couldn’t go back to the next meeting and say, yeah guys thanks for the advice, but. I had to make shit happen and those people held me accountable to it because they became my peers. And I think your friendship circle is the most influential group of people you’re going to have around you.
Andrew: What do you mean by proximity is power?
Brad: I just think your peers, like the circle of people that you spend your time with. And don’t get me wrong, I have friends that i just hang out with and great friends and family friends. But I make sure I get in a room with groups of people who are significantly better at areas of life and business then I am. Whether it be the finance guys or the marketing guys, whether it be some of these spiritual people I like to learn from, I think that getting in proximity with those people so you’re surrounded by them and you become a part of their peer group and held accountable to their standards.
Andrew: I see. And when you said that you have a think tank, what do you mean by a think tank? Why are you smiling when I ask that question?
Brad: The think tank is so cool. Well the first thing, the think tank’s got a few rules. So anyone who comes to a think tank it’s all white boards. It’s similar to this room here where it’s all white, it’s kind of just square, and it’s all white boards. And when you come in first of all you have to bow at the wall because the idea is going to be on the whiteboard by the end of the session. And the second rule is when you’re killing it and when you’re acting like the boss you have to wear aviators. Sunglasses. It’s funny.
Andrew: So I walk in, I bow to the whiteboard because all my best ideas are going to be up there, and when I’m on fire coming up with great ideas and adding them to the board I’m wearing aviators because I’m on fire. It’s so bright in here I got to wear the shades. Alright, already I’m into it. Who else comes in this room with me?
Brad: That’s my group of people, I invite people in who I think are great. Our team here, our operations manager, our marketing guys, our staff, our people (?) coming. And we create some really cool stuff in there. So look, it’s a lot of fun, it’s full of wank factor that’s for sure with the aviator’s and stuff, but it gets people moving it gets juices flowing and it’s been pretty cool.
Andrew: And if you happen to have an interesting banker or an interesting software entrepreneur you might bring them into this room too, he’s in a think tank.
Andrew: Okay, and what kind of ideas are you looking for in there?
Brad: All kinds of things. I mean that’s where we created the finance company, that’s where we created our new dealership model, that’s where we get the math for how many boxes we’re going to order for this weight. You know, literally everything.
Andrew: Is that you start off, I hate to take everything so literally, but I want to fully understand it. I want to get beyond the, I want the fun and I also want the understanding. You get in the room, do you put a big goal on the board like, how the hell are we going to sell more bikes if our financing company pulls out? Is it that thing? And then everyone just goes to town?
Brad: Exactly. So like the other day we’re like how can we sell 1000 more bikes this year. And we came up with some great strategies to do that.
Andrew: Gotcha. What’s wank factor?
Brad: It’s like all the fancy stuff, you know, wanking it up, talking it up, yeah. Being the boss.
Andrew: I know what wank is, but I see what you mean. It’s like the, I don’t even know how to explain it, I think we get it.
Brad: I think it’s an Australian thing.
Andrew: You guys have sexual harassment lawsuits where you get in trouble for talking like this? No.
Brad: I think it’s not a sexual term, it’s wank. Like all the fancy stuff, we call it wank factor in Australia.
Andrew: All right. I dig it. What else? There was something that I wanted to ask and I just lost the question. What am I missing? If you were sitting here, the guy who happened to be, brought his bike and saw that some other kid had 4 bikes and his father had a helicopter and you said what the hell is it that I need to do? If you talked to that person today what would that be, what would you ask him? What would you want to hear if you were listening to you right now?
Brad: I would want to hear that you’ve got to learn. You have to get yourself educated. Read some books, get on YouTube, learn from some people who are doing what you want to do. Learn, learn, learn and then start to make mistakes, get started and mess it up. I think that anything worth doing is worth doing poorly to start with. So get started, make some mistakes, strengthen up, and I think that’s how you grow. Get around some people who are going to really influence your decisions and help hold your standards to a higher level. I think if you self-educate, get great proximity, and be persistent, you’re on the way.
Andrew: I think we got a lot of quotable lines in there. Let me say this, I’ve been neglecting to say it at the end of some interviews, so I’m going to say it right now before I say good bye. Before I ask you, a final question, I don’t know we’ll see what comes up. Here’s what I’m going to say guys, if you are into learning the way that I am, the way that Brad is, I want to introduce you to mixergypremium.com where I bring in entrepreneurs and I say, turn on your computer screen, break down what you do step by step and let me see it. If you manage a group of people all across the world, show me how you do it. How do you keep them all working on the same project? How do you keep them all working at their best? How do you keep them producing a company that you couldn’t produce on your own? If you’re really good at getting customers, show me how you do it. It’s all these experienced entrepreneurs that come in and teach on mixergypremium.com and if you’re not a member, I urge you to sign up, and if you are a member start taking those courses and also listen to the hundreds of interviews that are now banked in that place. In mixergypremium for you to listen to and to learn. Proximity is power. Mixergypremium.com I guarantee it. Alright, you know, here’s the final thing. One of the big campaigns that you did that especially worked well is going to talk to students and saying don’t do drugs and have fun the clean way. That is an incredible message, that’ll make you feel good, but also puts you in front of people that potentially could be riding your bikes. Where did that idea come from?
Brad: Well it came from two things. This has always been my passion. I didn’t know it was going to be in my argument campaign when I started. And I make sure that I sort of (unclear) make sure that I go to make time to go to places that I would never have the ability to buy motorcycles. We take our bikes there, we teach them to ride. We give them an opportunity to ride motorcycles because that’s just what you do. You don’t advertise it, you just do it. So that’s what I do for myself, but for a marketing campaign I realized that this could really start to work. And that is that my mission actually is to get young people involved in action sports so they get a clean adrenaline rush. You know, from activity rather than from drugs, crime, and violence. We created a few really cool campaigns, one of them is weekends at camp. We got a lot of different little things about go and have a drink this weekend, but make sure it’s not the only thing you do. In motocross we have a thing called bench racing. So after you’ve had a ride, the best part of the ride is sitting down on the bench and telling your mates how fast you are. So go and do that, but make sure you’re bench racing. Or for the younger kids it literally is get a clean adrenaline rush.
So, for us, it has really just been about getting kids outside, active, and feeling their heart racing when they’re at the top of a ramp, or about to ride a dirt bike for the first time, grinning ear to ear. At that moment they can learn so much, not about action sports, but so much about themselves. That they’ve got to focus, they’ve got to have discipline and learn consequence. If you mess up on a motorcycle you crash and it hurts. There’s so many metaphors to laugh at at motocross. I think it’s a great way to teach young people education skills for life.
Andrew: Damn it, now even I want to ride a motorcycle. I’m dying to. Now here’s what I want, if you’re ever in San Francisco, where I happen to be, or if there’s another way to do it, I would like to not just come over and learn how to ride, but maybe even do a little event where we get other people to come and learn how to ride with me. I’ve got to try this now. I love it.
Brad: Let’s do it. I approve. April next year, it’s on.
Andrew: You’re coming to town?
Brad: I’m coming to town.
Andrew: Okay, you and I are like besties now via email, we’re pen pals. So let me know before you come into town and we’ll find a way to make this work. I see tons of emails going back and forth but it was worth it. Your energy, man, is so contagious and the ideas are electrifying and I’m really glad that you did this interview. Thank you so much.
Brad: I thank you for bearing with me, I’m sorry it was a 12 month wait time. So thank you guys, I’m a huge fan of what you do. Thank you for exposing stories of other entrepreneurs as well, for people like myself to listen to. I’m a fan, so I’m blessed to be here sharing my story. Thanks again and can you say BRAAP.
Andrew: Thank you all for watching.
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