Episode Summary
Steve Shallenberger: Welcome to all of our Becoming Your Best podcast listeners wherever you may be in the world today. We are so honored to have you with us and this is going to be an interesting podcast today. This is your host, Steve Shallenberger, and we have a very interesting guest with us today with over two decades of internet experience at the executive level. He is an internet industry veteran. And in addition to his Shark Tank appearance, he’s been featured nationally on CNN Money, People Magazine, the Adam Carolla Show, and many others. So, welcome, Stephan Aarstol. Did I say that right?
Stephan Aarstol: Yep. You got it right, Steve. Thank you. Nice to be here.
Steve Shallenberger: Okay. Yeah, I love that name, it’s a good one. And well, let’s get right into it. I’d like to tell you a little bit more about Stephan. In 2015, to challenge long-held delusions about unhealthy startup work cultures, Stephan moved his whole company to a five-hour workday and would later write a book entitled The Five-hour Workday about the experience which would spread the idea to tens of millions of people worldwide, and get press in over 20 countries like New York Times, Wall Street Journal, many more. He was subsequently hailed ‘the world’s best boss’ by Hamburg’s, Germany’s number two newspaper, Morgan Post, and ‘America’s best boss’ by the UK Daily Mail. In 2017, Stephan was named to our city’s 2017 list of the Top 10 most influential business leaders in San Diego, so way to do it. Stephan, that’s great.
Stephan Aarstol: Thanks for the intro, Steve.
Steve Shallenberger: Okay, now to get us going, tell us about your background, including any turning points in your life that’s had a significant impact. And how did you get to where you’re at today?
Stephan Aarstol: Sure. Yeah. So, I went to grad school down here in San Diego, and then came out in 1999, right when sort of the internet boom was happening. And I went right into the internet space, they were just hiring grad students, and so I started in a company in the radiology world. And that’s really where I cut my teeth in learning internet marketing, and how internet business models were sort of transforming the world. And so, after about five years of that, 2004, I went off on my own, I worked sort of a side gig for about a year with a poker chip company – highpokerchips.com – for home games. If people really wanted to buy a $500 set of poker chips, they would come to us.
Steve Shallenberger: Wow.
Stephan Aarstol: The same chips as Vegas. I don’t know if you play poker. But there was a boom in poker at that time, and I sort of realized that and I went to buy poker chips, and it was hard to get them. So, I said, “Well, I’ll make poker chips, and we’ll sell them online, direct to consumer.” And so, I did that for about five or six years and it went really well. I thought I was going to retire, and then it’s sort of, like everything online, got commoditized. And a lot of competition came in, they saw what I was doing. That came down to where I was job hunting in about 2010 and looking for other businesses to start. And that’s when I started Tower Paddle Boards, which is my main company now that I’ve been running for the last 10 years. It’s a direct-to-consumer stand-up paddle board company, but it really’s a more holistic beach lifestyle company, and we’ve started some offshoots of that. One is Tower Electric Bikes, which we started about two years ago. And it’s basically high-quality electric bikes at half price because we sell them direct to consumers.
Stephan Aarstol: In 2012, we were on Shark Tank, we got Mark Cuban to invest $150,000, for 30% of our company. At the time, we had about $100,000 in sales lifetime, in the history of Tower Paddle Boards. Since then, we’ve gone on to do over 40 million in sales, and we’re one of Mark Cuban’s best investments in the history of the show. So, we’ve had some success. In 2014, we were the number one fastest-growing company in San Diego. The next year, we were on the Inc 500. So, we had this good run like a startup, and we wanted to say “How do we make this really a $100 million company?” That’s really when we came up with the idea of the five-hour workday because we were this beach lifestyle company, but we were operating more like a startup with long hours. We were two blocks from the beach, but we weren’t using the beach. So, we said, “If we want to really build a big company, we need to be a little bit more like Patagonia or something where we really live the ideals of our brand.” Then the five-hour workday, really dovetailed with that, so that’s what we did. And we did an experiment for, initially, it was going to be three months, but it worked so well we continued to do it for a couple of years.
Steve Shallenberger: Okay, wow. That’s a fun background. So, the paddle board is the type of thing that you stand on in a lake or a river, kind of like a surfboard, right?
Stephan Aarstol: Yep. Yep and paddle around.
Steve Shallenberger: Okay. And the E-bike is what we see someone tootling around in the city on is that it? They pick it up somewhere, and… Is that it?
Stephan Aarstol: Yeah. It’s really transforming transportation. It’s not like… Overseas in Europe and China, they look at bikes as transportation, but in the US, they do not look at bikes as transportation. It’s very rare, a small percentage of the population that commutes to work on a bike, right? But with E-bikes, it’s starting to change – bicycles from being like a recreation thing to more of like a transportation alternative.
Steve Shallenberger: So, it’s a bicycle with an electric motor, yeah?
Stephan Aarstol: Yeah. And you can go 25 miles an hour on these, and you can have a range of 50 to 80 miles.
Steve Shallenberger: Okay. Wow.
Stephan Aarstol: You can open up your community.
Steve Shallenberger: And so, did I hear you say, Stephan, that you are selling a personal model?
Stephan Aarstol: Yeah. So, we sell two models. It’s like a beach cruiser, it’s like an electric beach cruiser, so we have a men’s bike and a women’s bike. We only have two models, but it works for pretty much anybody.
Steve Shallenberger: Okay, great. Well, tell us what it was like being on Shark Tank. And is Mark a part-owner of both of your companies are just one of them?
Stephan Aarstol: Yeah, he’s a part, he owns 30% of all our companies. And he started and bought into Tower Paddle Boards, but anything we do is sort of a derivation or we start some new business entity, he owns a portion of that. We’ve started a couple of other businesses, Tower Beach Club is an event space in San Diego here. That one kind of had a rough run the last year with the bans.
Steve Shallenberger: Yeah, I can imagine.
Stephan Aarstol: And then another company called nomiddleman.com, which is an aggregation of all the direct-to-consumer brands in the world. Just sort of an information source kind of anti-Amazon.
Steve Shallenberger: Okay. What was it like being on Shark Tank? Were you nervous?
Stephan Aarstol: I wasn’t really nervous going on there, but I did screw up my pitch. I’m known as one of the worst pitches in the history of Shark Tank that still landed a deal because I went in there, my slideshow didn’t work, I forgot my pitch. I was stuttering and stammering and then silent for like, five minutes. They were tearing into me. I had to make a rocky comeback, but it made for good TV, Steve.
Steve Shallenberger: Oh, that’s great. Well, how’s it been working with a shark?
Stephan Aarstol: It’s been good. Cuban’s been very good to us. I think because we’ve done well for him. If we weren’t doing so well for him, I think it wouldn’t be going so well. He has sort of expectations, but he put in $150,000, and I think we’ve cashed him out well over a million dollars in dividends today, and he still has his equity position, so we’ve kept him happy and he’s been very supportive of us.
Steve Shallenberger: And would you say that he has contributed to your growth, he’s helped?
Stephan Aarstol: I mean, definitely. When we signed him on, I looked at him, at his investment more as a celebrity endorsement, as opposed to just getting money. And so, we went from being the nothing, nobody Tower Paddle Boards to the Mark Cuban owned paddle board company. And we put his face – and this was part of my negotiation, was “Mark, I want to put your face right on our website, are you okay with that?” And he’s like, “Yeah. I’m not going to handhold you and do introductions, and do a bunch of work for you, but definitely leverage my brand.” He was all about that. He’s just like, “Yeah, that’s what you should do. That’s a smart move.” And so, we’ve done that, and he’s been invaluable to me because, I mean, you’ve run several companies, and it’s a little uncomfortable when you’re at the top of a company and you come from a background of working in a company where you have people over you. And a lot of people are like, “Oh, I want to work for myself, so I don’t have to deal with any of these guys.” But really, when you’re making the final decision, it’s a very uncomfortable thing. So, what’s been nice about with Cuban is, it’s my company, I’m the dominant owner, I own 70%. So, I can really do whatever I want to, but when I really have questions, and I’m not sure about things, I can throw them over the wall and get his opinion on. So, it’s kind of like having that CEO over top of me when I need it. So, that’s been very useful.
Steve Shallenberger: Yeah, that’s invaluable, isn’t it? There’s nothing like being able to pass by your ideas and especially when you’re giving it your best shot and say, “How do you see it?”
Stephan Aarstol: Yeah, exactly. And I’ve learned in dealing with Cuban because early on, I would pass everything by him. And then I’m thinking about this for several weeks, in-depth thought, he looks at it for five minutes and responds to my email in 10 minutes. And he says, “No, I don’t like that.” And then I’m like, “Why? Have you really thought about this?” I’ve learned if I just want to do something, I do it and I inform him. If I have a question, ask my question, but that took a little getting used to.
Steve Shallenberger: Yeah, well, that’s great. That’s wonderful to see things from a whole different point of view. Well, let’s shift our discussion. And what prompted you to move your company to a five-hour workday? You kind of touched on a little bit, but let’s go through this a little bit more in-depth.
Stephan Aarstol: Yeah. So, that was really it, we wanted to… I mean, one of the big impetuses here was I had some real rockstar employees, that’s why we had that significant growth because we were able to attract pretty good people. And then I had some that weren’t so good. And I said, “Man, it would be great if I had a company of just these high-performing individuals. How do I attract them and retain them?” And I sort of thought about how I was working and the incentives I had as an entrepreneur. I would come in, get my work done, and get out of there. I would walk out of the office at one o’clock, and I kinda felt kind of guilty for leaving my employees behind, but I’m like, “I earned this.” And then I said, “Wow, it would be interesting if we could do that for the whole company and give them the same incentives that I have.” So, when we rolled it out, I just sort of announced everybody, I said, “Hey, we’re going to do a five-hour workday this summer. We’re going to work 8 am to 1 pm, straight through, no lunch.” So, there’s no time wasted before and after lunch, and then the food coma and all that. And so, you’re going to walk out at one o’clock, I’m basically going to give your life back. Your work week will be better than most people’s vacation weeks, and then you have the weekends as well. But my ask is you have to be as productive or more productive, or you’re going to be fired. Give them their lives back, but put pressure on them, which I thought was very aligned with the incentives that I had myself, and other entrepreneurs had. And we did an experiment for three months and productivity was great. People just figured out how to do their job faster, no matter what their job was. So, we extended it, and we continued to do it for two years. So, there were some problems, for sure, we ended up going to just summers only after the first two years because we had a downturn in our business. And now, in the pandemic, we didn’t do it at all because we were sort of in rough times, we had to just fight for our survival. And then this year, now we’re wrapping it back up to where we’re going to do it. But we’re only going to do it for four months, every year from August 1st to the end of November, following years that we can increase revenues. So, if revenues are going down, we’re going to roll up our sleeves and work. But the company can earn a sort of this company-wide bonus of this sort of incredible workday for four months if everything’s going in the right direction.
Steve Shallenberger: Yeah. Is that legal in California, working straight through?
Stephan Aarstol: I mean, I don’t really tend to work through, but I think it actually is. With the five hours, you don’t have to give breaks or something like that. Everybody’s on salary, it’s not like…
Steve Shallenberger: Yeah, okay.
Stephan Aarstol: If someone wants to complain, they can complain.
Steve Shallenberger: Right. Okay. So, what are the lessons you’ve learned over the years after implementing the shorter workday?
Stephan Aarstol: The positives that it did was it really turned us into a productivity-focused company, where everybody was looking for and identifying sort of productivity tools to how do we do our job faster. What didn’t work, what I was sort of disappointed, and really why we got away from it with the full time is it didn’t help attract and retain people. I mean, I tend to hire people that are coming straight out of school, we have turnover, every two, three years, and I don’t think people – maybe times are just really good right now – but I don’t think people care what you pay them, or what their work hour is. I mean, they could go work 80 hours or 95 hours a week at Tesla or Wall Street, or they could work 25 hours at a surf company, they don’t really care. If they’re aligned with the company ideals, they’re going to do it and they’re going to be happy to do it. And then, when I bring people in or in the early days bringing them in at $36,000 a year and a rockstar can raise that salary to set to double, $70,000 within a couple of years because we really move those people up and we fire the other people, and then they would leave. I don’t think money motivates these people or hours. What really motivates them is alignment with what you’re doing. And so, that was sort of a surprise to me. It’s not a hack, the five-hour workday is not a hack to get and retain workers.
Stephan Aarstol: And when I wrote the book, The Five-hour Workday, I wasn’t trying to write a book here, but I was writing articles about what we were doing and there was this great response to what we were doing – 10,000 comments or something like that. Just nuts. So, I’m like, “Well, we’ll write a book and we’ll put a book in every paddle board we sell, and that will spread our message and sort of be in alignment with our brand.” And in writing that book, I had to go back and research the history of work, and we found out that the eight-hour workday, I assumed it just always existed, but it was actually invented in the early 1900s. It was basically Ford Motor Company and some other people, basically the Industrial Revolution. The eight-hour workday was a reaction to that. How do you get machines working 24 hours a day and people working in eight-hour shifts? Fast forward 100 years, we’re using basically a workday that was optimized for a factory floor, which is kind of crazy.
Steve Shallenberger: Yeah, indeed. And I would guess that just thinking about the different industries, it may depend a little bit whether it works. If you work for a bank, and you’re competing against the bank that has certain hours or in a service industry where you can only service that there are certain hours you can service, it may depend a little bit on the industry. But what have you found on that?
Stephan Aarstol: That’s what I think people just assume, and I think it’s wrong there. Because a lot of people are like, “Well, sure, that’s going to work for your internet marketing company, but it’s not going to work for us.” We changed our customer service and our store hours to five hours. We put the changed hours on our website. We’re not a 7-Eleven, it’s not like people are buying paddle boards 24/7.
Steve Shallenberger: Right. Yeah.
Stephan Aarstol: They know your hours, they sort of go around that. The same thing with our shipping department and our warehousing. They were like, “Well, this isn’t really going to work for us because we’ve got to ship the same number of packages, and we’re barely able to do that now, and we’re probably going to grow 50% this year. So how is this going to work?” But what they did is they learned to use the software that they were already using, they just learned to use it better. And they cut down the shipping time from five minutes to 2.6 minutes for every package because you put pressure on them, and that pressure sort of built better needs. And that really was the key. And if you look at a lot of industries, when you put an unrealistic constraint upon people, it forces creative thinking. If you look at Amazon, basically Amazon doesn’t really – I mean, they do now I think, but historically – they don’t answer the phone, you can’t call them. You would think that’s not going to work, that business model. But they figured if somebody needed to call us, something about our model was broken because there was a way to automate all of that communication, and just fix all of the problems, so you don’t initiate a phone call. And that’s what sort of a five-hour workday mentality gets at. Today with the pandemic, there’s been an artificial constraint put upon everybody where you can’t travel, and you have to work from home, and that constraint, I believe, is going to create a lot of sort of creative solutions to problems, and we’ll rethink the way we work. And I think we’re going to rethink and there’s going to be better outcomes.
Steve Shallenberger: So, Stephan, how did you ultimately find out a shorter workday doesn’t make business sense, businesses more profitable and productive and employees happier, healthier, more loyal? I mean, what did you find out on that? What was your experience?
Stephan Aarstol: Well, I mean, as you know, Steve, there’re a lot of variables in any business. But when we implemented the five-hour workday, we did about $5 million in revenue the year that we sort of implemented it. The next year, we did $7.5. So, I thought this is working, right? But then we sort of plateaued, I think, the next year, we did like $7.2, and then we started to decline to $5.1, $4.3, and then $2 million. So, we went from $7.5 to 2 million. The first two years were year-round, but then we went to summers only, but things were declining. And so, at some point, I said, “Well, maybe this isn’t working.” It was an experiment, so I didn’t want to end. As your revenues decline, you don’t really have the luxury of doing experiments, so we sort of got rid of it. And really where it dawned on me that this is not working, and the moment we got away from the year-round five-hour workday was I had nine people at the time, and within a 90 day period, four of those employees left. One of them, I fired, so that was my fault, but they weren’t performing well.
Steve Shallenberger: Right.
Stephan Aarstol: And then three others left. I mean, these are young kids being paid well, they have a five-hour workday and they’re leaving. So, my whole original premise of attracting and retaining people with this sort of renegotiation with the labor of a five-hour workday wasn’t working. And I said, “I don’t know why, but it’s not working.” So we got away from it at that point. I think really what happened there is we broke the company culture. I mean, we were a startup before and I think when you’re working in the trenches, alongside other people in the startup, long hours, you form these very strong bonds. And then when you walk out of the office at one o’clock your work life is just this little thing you do before lunch that sort of affords you this great lifestyle, but the rest of your life gets much bigger. That’s great for employees, but it’s not great for a company, right? Because you might not be able to retain these people. So, we really went to a hybrid strategy. I liked some elements of it, but some elements of it I think were failing us. So, that’s why we went to the summers only, we did it for four months from June 1st to the end of September, the five-hour workday. And that’s when we did 70% of our revenue. So, we squeezed people. During our high season, we squeezed people for time. And that forced them to figure out creative ways to work faster. And then in the offseason, we went to startup hours, which allowed us to have that sort of startup culture is sort of a hybrid model. And as I told you, now we’re doing it only in years following where we increase revenues because that’s the other thing is people get sort of entitled. The first people in our company that we switched to the five-hour workday, they had earned it. But three or four years later, people were coming into the company that had never earned the five-hour workday, and they were just treating it like this is sort of a part-time job, and that really wasn’t what we were going for.
Steve Shallenberger: Well, great. Well, I want to compliment you on your humility. You put yourself way out there in publications and throughout the world saying, “This is the way to go.” And then, having gained more experience and wisdom, willing to say, “Listen, I see some flaws in that, and it really depends.” And you’re sharing your learning with other people. And the fact is, anytime we have a business, there’s a lot of factors that go into making it successful. And things are always changing, and so you’ve got to figure that out, what really creates the optimal point of effectiveness and success for your associates, how do they stay happy, how do they stay productive, and every circumstance is a little different. So, thank you for sharing your experience because everyone’s trying to figure out that same thing: What’s that optimal level of all these different levers we’re trying to pull to create successful enterprises and serve the public the best we can?
Stephan Aarstol: Yeah, and I think that I’ve learned that out of necessity. You can’t be afraid to change your mind when the market is changing so fast today, and we operate in a sort of disruptive business models, direct-to-consumer. We were a big seller on Amazon for a while – 50% of our revenues – we walked away from that. And we walked away from maybe $4 million in revenues three years ago because we said, “That ship has sailed.” You can no longer sell through Amazon and be profitable, so you really have to change your thinking every few years. If you don’t, I think in the modern business environment, you’re going to get swallowed up pretty quickly.
Steve Shallenberger: Right. Well, that’s good. Now, let’s just think about this a decade later. So, you were on Shark Tank 10 years ago?
Stephan Aarstol: Yeah, about nine years ago.
Steve Shallenberger: About nine years ago. So, how has winning on ABC’s Shark Tank continued to change your life?
Stephan Aarstol: The interesting thing about Shark Tank – and it’s funny, I’m on a group on Facebook of people who prior have been on Shark Tank, it’s called Shark Tank Pals. And you can only get there if you’ve been on Shark Tank. And people are in there airing their grievances and stuff like that or sharing secrets and whatever. But the funny thing is, a lot of these people are like, as soon as they’re on Shark Tank, all of their friends assume they’re millionaires and they’re successful. It’s kind of a joke. Because you go on that show, and really, you get about four days of heightened traffic to your website, and then it’s gone. It’s just a wave that sort of washes over you. Now, when we went on, my companies I’ve always built them by sort of search engine optimization, so we create very top content and then get links into our content and that raises our presence within the organic search results. So, when I went on Shark Tank, I was out there getting media about our Shark Tank appearance for the specific purpose of getting links back to my website from abc.com, or this newspaper, or this business journal or stuff like that. So, we ended up getting maybe 12, or 15 articles, pretty well-placed articles about this little surf company is going to be on this TV show. And that is really what made the difference for us. It raised our search profile and the trust in our brand and our link profile. And that had a perpetual benefit for us. I mean, it’s kind of PR today is really has a perpetual benefit if you can get links back to your website. That’s what we did, and so that’s had a lasting effect. But a lot of companies, I’m telling you that the Shark Tank effect just sort of washes over you. And I think you can get a little intoxicated with the idea that we were a company on Shark Tank and sort of stake your claim on that, and I think that’s the wrong move. And I had a lot of my employees telling me the same thing about three or four years after it. That’s why we went to the five-hour workday, that’s why we really tried to define ourselves as this sort of revolutionary, direct-to-consumer company, rather than just we were on Shark Tank.
Steve Shallenberger: Yeah, these are great lessons. Just out of curiosity, Stephan, did you have a publicist that helped you with social media? Is this something that you had from your own experience where you could take these articles and that might reference them back to your website? How did you do that?
Stephan Aarstol: Well, when we were on Shark Tank, originally, I had just hired my first employee three weeks earlier. And we had no money and I was job hunting a year before. In 2010, my income was $9,000. We were not hiring. And I found, actually, PR firms are a waste of money, especially for small companies. I mean, if you can afford it, I think it’s a nice luxury to have, but I think the best PR is done by sort of the CEO of the company, rolling up your sleeves and getting out there and doing it. It’s not rocket science. That’s how we did it, and it was pretty effective.
Steve Shallenberger: Okay. Well, good. Any final tips you’d like to leave with our listeners today? This has been really terrific. I’m so grateful that you’ve been so open about sharing your experience, the fact that you’ve hung in there and kept trying. How have you done that? And then let’s get to this last question. How do you hang in there when things get tough?
Stephan Aarstol: Yeah, I just think you’ve got to be able to adjust on the fly and keep your costs down and keep experimenting with new things. One takeaway I would have because a lot of people are somewhat skeptical, especially in America, we had a much better response outside of the US, honestly, to the five-hour workday. In Germany, it was huge because they see themselves as the most productive people. It’s just not about throwing 80-hour workweeks at something, it’s about throwing a reasonable work week and raising your productivity. But a lot of companies and you mentioned this earlier, this is not going to work so well for some companies, as much as other companies. But my takeaway to most people and most companies would be, I think this can actually work for every company if you look at it as a three-month task, or almost like efficiency training camp you’re going to do. So, let’s say you have 1000 workers, tell your workers, “Okay, for the summer, we’re going to do a five-hour workday, you need to figure out how to work as fast as you were or we’ll fire you, basically. So, we’re going to give your life back for the summer, it’s going to be the greatest summer ever, whatever company, and then you figure out how to work faster. And if you’re not, you’re going to get fired.” Put that pressure on people. I’m telling you, they will find out ways to work at twice the speed that they work at, and then you roll it out. I mean, the plan is to come out of this in the fall. And when you come out of that in the fall, you have trained all your workers to work at twice the speed. They will have individually identified the productivity tools that they are not using today but they should be using because you’ve applied pressure to them. And I think you’ll have a workforce that works with twice the speed of the one you had three months prior. I think that can work for every business.
Steve Shallenberger: Okay, really intriguing, really intriguing. Okay, now to the final tips. Anything you’d like to leave with our listeners today?
Stephan Aarstol: From a five-hour workday perspective, that would be my tip for people to try. Just because I’ve been in the internet space, I think something really interesting to look at, there’s really two themes that run through our company, and it’s really two ways the world has changed. One, the access to the internet and productivity tools and stuff like that has made humans, basically, we have nuclear power at our fingertips. So, we have the ability to be ten times as productive as we were 30 or 40 years ago, and a lot of people aren’t using those tools. So, I think, identify and use those tools, and you can become a lot more productive. And if you have a company, you should expect your workers to identify those tools and become more productive. So, that’s one half of the equation, the internet has made our workforce more productive, we need to find that productivity and use it.
Stephan Aarstol: On the other side of it, globalization has changed what it costs to make products. And that’s really what the direct-to-consumer movement is for our paddle boards and our electric bikes. We’re basically able to sell half-priced paddle boards because we don’t use the traditional distribution channels, we just sort of opt-out of all of those and we just go direct to consumers. But the problem today is you have these new middlemen that have popped up in the form of basically Amazon and Google. So, all of the little middlemen are disintermediated as things went online. But now everybody buys things through Amazon or through Google AdWords or something like that. Amazon and Google are taking 50% of that revenue. So, what’s happened is we’ve gone back to retail prices and the entire consumer base has not seen a benefit of globalization. We should be buying products for half of what we bought them for 20 years ago, but we’re not because now we’re using these middlemen. So, as a consumer, my tip is you should really look for a direct-to-consumer, look at the things that you’re buying, what distribution model they use. It’s no longer you get what you pay for it; it’s you get what distribution you buy through.
Steve Shallenberger: Right. And so, how do they buy your products for example? You brought up Amazon but it sounds like you encourage people or create your marketing model to go direct.
Stephan Aarstol: Yeah. I mean, if you’re buying from Amazon today is the equivalent of going to the corner store. Which is great, super convenient, I buy a lot of stuff from Amazon. But if you want the best deal, you need to go direct to the brands, and you need to go direct to the brands that have awakened and said, “Hey, we’re not going to give Amazon 50% of our revenue. We’re going to focus on just selling direct.” And then they’re able to lower our prices. That’s what we did coming into the pandemic. We dropped our prices by about 30%, we said, “We’re no longer going to advertise, we’re no longer going to sell on Amazon. We’re going to become a smaller company and give consumers a better deal.” So, for us, it’s towerpaddleboards.com, and it’s towerelectricbikes.com. But if you want to find the best direct to consumer brands out there, we have a website called nomiddleman.com, which aggregates hundreds of brands across thousands of categories and you can go find what are the three best people making sneakers, and you can find direct-to-consumer brands that are giving consumers an incredible deal. So, that’s what I would recommend.
Steve Shallenberger: Okay, so fun. Now, I’m sure, again, these are creative thoughts, and there’s no doubt, like you said, particularly in the United States, or maybe skepticism on the five-hour workday, but everybody has to work that out and that’s great. I mean, the fact you’re getting it on the board and say, “Take a look at this and think about” because we’re really saying how do we make our organizations among the best that they can be, the greatest output, the greatest service and have a sustainable model. So, how do you think COVID will affect all of this kind of thinking? What’s been your experience, your thought, especially in terms of workdays?
Stephan Aarstol: The five-hour workday isn’t like some magic bullet or whatever. We’re just spending a part of our time thinking about how we work, not just working. And I think that’s really, really important. And what tools you’re using. Are you using the correct tools to work? And I think once you’re forced to look at that, you’re going to find creative solutions. So, there’s a lot of different workday experiments going on. And like you said, COVID has put this sort of constraint upon a lot of companies. I think we found some interesting things. In education, we found some interesting things, we found some things that certainly don’t work in education. I think a lot of online learning, especially for high school kids is failing, really. But for companies, we don’t have trade shows now. Do we need trade shows? Now we don’t have business trips. Do we need to fly across the country to meet in person or was that just a big collective waste of time? Do we need offices or was that a collective waste of time? And then personally, for me, I think remote working is not the way to go. I mean, we do a five-hour workday, but I want everybody on the field at the same time in the same place, so you get this sort of “idea sex”, sort of the exchange of ideas among people working on hard problems in a similar space. So, I’m not hugely hip on remote work, but I think we’re experimenting with how we work, and I think that is the good thing. We’re thinking about how we work.
Steve Shallenberger: Yeah, good job. Great. Well, this has been so fun. Let’s repeat one more time for our listeners, how they can find out about what you’re doing and how to have access to your products, and also the nomiddleman.com, I think you said, very interesting.
Stephan Aarstol: Yeah, so the book if you want to read more about the workday and the history of work, really, The Five-hour Workday book’s available on Amazon. So, our companies and it’s easy to track me down. We’re a small company, you can just go onto our websites and email anybody and you can find me at towerpaddleboards.com, direct to consumer paddle boards. And then towerelectricbikes, direct to consumer electric bikes. And I’m telling you, an electric bike will change your life, I truly believe that. I mean, people will just be amazed once they try it. And then nomiddleman.com. That’s sort of the Amazon antidote.
Steve Shallenberger: Okay. Now because maybe some of our listeners will have the same question I have, describe what an E-bike looks like.
Stephan Aarstol: An E-bike is just basically a bike with a motor on it. But it’s an electric motor, so it’s silent. And there’s a variety, there’s probably 2-300 brands out there. And some of them, you can’t even tell it’s an electric bike, it just looks like a regular bike. The motors are integrated into the bars or whatever. And you can spend as much as you know, $10,000 on an E-bike. And then there are E-bikes that just sort of slap on a motor and they look like these sort of contraptions, and they’re really cheaply built, you can buy those for $700 to $1,500. Our bikes are a little under $2,000. It’s a very high-end bike, but we made it to look like a bike, but with off the shelf components because there’s a lot of E-bike companies coming into business and going out of business and a lot of “Well now I have this bike and there’s nobody to work on it or the parts are no longer available.” So, we’re very conscious of that. We’ve been in the direct-to-consumer game for 10 years, so we’re building this sort of a slow-growth company, and we’re building a long-term brand. We think that one day we will be the biggest E-bike company in the world, but we’re on a path to get there in 20 to 30 years.
Steve Shallenberger: Well, Orville and Wilbur would be proud of you. Well, thank you so much, Stephan, for being part of this show today, the Becoming Your Best show. That’s the spirit of it, everything we’ve been talking about. Really great visit, wonderful ideas, and we wish you all the best in what you’re doing.
Stephan Aarstol: Hey, thank you. Thank you for having me on, Steve.
Steve Shallenberger: To all of our listeners, it is such a delight to be associated with you. We appreciate your spirit, your interest, your dedication to learn and improve yourself. And the very fact that you do that is a great example to everybody that you associate with. So, wishing you a great day. This is Steve Shallenberger with Becoming Your Best Global Leadership signing off.
Steve Shallenberger
Stephan Aarstol
Founder of multiple companies, featured on Shark Tank