GE 176: How Half-Priced Paddle Boards & 5-Hour Workdays Grew Tower Paddle Boards’ Revenues 42% within 1 Year (podcast) With Stephan Aarstol

Stephan Aarstol Tower Paddle Boards

In this episode, Eric shares the mic with Stephan Aarstol, founder and CEO of Tower Paddle Boards, an online, manufacturer-direct brand in stand up paddle boarding which attracted an investment from billionaire Mark Cuban on Shark Tank. Tower Paddle Boards has been named as one of the top 10 success stories in Shark Tank history by Entrepreneur Magazine.

Listen as Stephan shares how he choked on ‘Shark Tank’ but still got a deal for $150K, how they grew even without spending a dime on advertising in the first three years, and how his book, The Five Hour Workday, helped his company double its revenues.

Download podcast transcript [PDF] here: How Half-Priced Paddle Boards & 5-Hour Workdays Grew Tower Paddle Boards’ Revenues 42% within 1 Year TRANSCRIPT

Time Stamped Show Notes:

  • 00:51 – Eric introduces Stephan to the podcast
  • 01:17 – Tower Paddle Boards is a beach lifestyle company founded in 2010
  • 01:28 – Stephan started a high-end poker chip company and transitioned to selling boards
  • 01:44 – Boards cost about $1,200-1,500 but Tower Paddle Boards sell only for $600-$1,000
    • 01:54 – Selling directly to consumers
    • 02:15 – The same board at a much better deal
  • 02:24 – Stephan still has his poker chip business
    • 02:33 – Stephan created the top high-end poker chip site, BuyPokerChips.com
  • 02:57 – Stephan was able to reduce his work week down and founded other businesses
    • 03:33 – Read Tim Ferris’ The 4-Hour Work Week book
    • 03:55 – The poker chip company was a one-person company
    • 04:01 – Stephan stopped working on Tuesdays and Thursdays
  • 04:35 – The poker chip business couldn’t grow anymore so Stephan carved out another business
  • 05:07 – Stephan hired employees after 9 months of Tower Paddle Boards
    • 05:13 – Featured on Shark Tank in 6 months
    • 05:44 – They were able to grow the company quickly
    • 06:01 – The 4-Hour Work Week principle has been formalized in Tower Paddle Boards
    • 06:17 – Living your brand
    • 06:39 – Net effect was doubling everyone’s per-hour earnings
  • 07:18 – How Stephan holds people accountable
  • 08:08 – The information age opened a revolution of productivity
    • 08:16 – Not an incremental change but exponential change
    • 09:04 – All kinds of productivity tools are now available
  • 09:08 – The Five Hour Workday
    • 09:14 – Check out the website to get the first 50 pages of the book for FREE
    • 09:38 – By constraining your workday, you’re forced to go out and find productivity tools
  • 10:19 – The real amount of work getting done is just 2-3 hours/day
  • 10:37 – Dropbox makes you productive
    • 11:07 – Frees you up to work anywhere
    • 11:43 – The faster the information flows, the faster the productivity
  • 12:03 – In the first 3 years, Tower Paddle Boards didn’t spend a dime on advertising
    • 12:20 – We wanted to figure out how to get the traffic for free
    • 12:30 – Constraints breed productivity
  • 13:53 – Have a compelling value proposition
    • 14:25 – The marketing does itself
    • 14:37 – Cutting out chains and directly selling to consumers
  • 14:57 – Create content about your value
  • 15:11 – The Five-Hour Work Day as an example
    • 16:24 – Writing a book on a topic explains what you’re doing
  • 17:11- The Shark Tank experience
    • 17:19 – Shark Tank called Tower Paddle Boards
    • 18:15 – Stephan went up to L.A. for the interview
    • 18:27 – Mark Cuban was going to be on Shark Tank
    • 18:51 – Stephan freezes up while presenting and tried starting again
    • 19:32 – Stephan ended up getting a deal from Mark Cuban for $150K
    • 20:27 – Since his pitch, Tower Paddle Boards already made $20M
  • 22:49 – Working with Mark Cuban
    • 22:59 – Less about getting $150K but getting a free celebrity investment
    • 24:02 – Mark has a team but Stephan doesn’t use them
  • 24:38 – What’s one tool that added a lot of value to your business? HR tools like Recruiterbox and Zenefits
  • 26:18 – Panjiva: A sourcing tool
    • 26:38 – Alibaba vs Panjiva
    • 27:24 – What 9/11 did to imports
    • 28:43 – Sourcing 2-3 hours vs years and trips to China
  • 29:07 – What’s one must-read book you recommend for everyone? The 4-Hour Work Week
  • 30:49 – Connect with Stephan on Tower Paddle Boards or on The Five Hour Work Day

3 Key Points:

  1. Cutting out work hours doesn’t mean cutting out revenues.
  2. Constraints help bring out productivity.
  3. Products can sell at a lower price by just cutting off supply chains.

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Disclaimer: As with any digital marketing campaign, your individual results may vary.

Full Transcript of The Episode

Show transcript
Stephan: I'm known as the worst pitch in the history of Shark Tank that still landed a deal.

Speaker 2: Do you want to impact the world and still turn a profit? Then you're in the right place. Welcome to Growth Everywhere. This is the show where you'll find real conversations with real entrepreneurs. They'll share everything from their biggest struggle to the exact strategies they use on a daily basis. If you're ready for a value packed interview, listen on. Here's your host, Eric Siu.

Eric: Before we jump into today's interview, if you guys could leave a review and rating and also subscribe as well, that would be a huge help to the podcast. If you actually enjoy the content and you'd like to hear more of it, please support it by leaving us a review, and subscribe to the podcast as well. Thanks so much.

Hey, everyone. Today we have Stephan Aarstol who's the CEO of Tower Paddle Boards which sells the best paddle boards, which attracted an investment from billionaire Mark Cuban on Shark Tank. Tower Paddle Boards has been named as one of the top 10 success stories in Shark Tank history by Entrepreneur Magazine. Stephan, how's it's going?

Stephan: Good, good. Thanks for having me on the show, Eric.

Eric: Yeah, thanks for being here. Why don't you tell us a little bit about who you are what you do?

Stephan: Sure. Tower Paddle Boards is a beach lifestyle company. We were founded in 2010. I've been an entrepreneur the past 12 or 15 years. I started in a poker chip company and then transitioned now into a paddle board company. We're direct to consumer, so we sell boards at basically half the price of boards you'd buy in retail. We've had a lot of success with that.

Eric: Great. How much are boards typically?

Stephan: A good board in retail is $1,200 to $1,500. We're selling boards for $600 to $1,000.

Eric: How are you selling it for so much cheaper?

Stephan: We just direct to consumer, so we're out of the distribution channel. We don't have wholesalers and retailers. We're manufacturing them and we're selling them direct to consumers. We use the same factories that a lot of the major brands use. We'll just go to that factory, make boards and sell them direct to consumer. It's the same board, just a much better deal.

Eric: Interesting, okay. Why did you decide to get out of the poker chip business? Poker has a soft spot in my heart.

Stephan: Sure. I didn't get out of it. I still have that business. I started that in 2003, and there was a huge poker boom that was trending. I basically created the top high end poker chip



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site in the world called BuyPokerChips.com, but it was at the height of the boom. It was 10 times what it is today. These are poker chip sets that cost $500 to $1,500 for a home game. Very niche, but it was a worldwide market. That peaked and went down. I basically had to reduce my work week down from about 40 to 50 hours a week to working 3 days a week, 4 hours a day, and then I looked to start another business. This was over a period of probably 2, 3, 4 years. I started a number of other business, nothing that really hit, and then the paddle boards really took off. Now we'll do 9 million this year. It's 20 times what the poker chip business was.

Eric: Awesome. You talked about being able to create a system where you're going from 40 to 50 hours a week to a couple hours per week. Can you explain that a little bit?

Stephan: Sure. I'd read Tim Ferriss's 4-Hour Workweek book, and basically was speaking directly to me as an internet entrepreneur. The book is about how to get out of the corporate world and go off on your own, and how to use outsourcers and do all of this, and really take things that you think are non-negotiable off the table, and just really focus in on what 20% of your effort is creating 80% of your output. At that time it was a one-person company, the poker chip company. I was the shipping guy, the customer service guy, all of it. I just figured out how to reduce my workweek down. I stopped shipping Tuesdays and Thursdays, and stopped answering the phone Tuesdays and Thursdays, and then I didn't even work on that business Tuesday and Thursday. I just devoted solely to other stuff. Pretty soon I was able to get rid of the afternoons Monday, Wednesday and Friday, and the business wasn't suffering at all. It freed up my time to go for more important stuff.

Eric: It sounds like in the past it was maybe you were driven by I have to do this. Everybody else is working. All of a sudden you just decided to cut out certain days, and everything turned out to be okay.

Stephan: I couldn't grow the poker chip business anymore, so I needed to start another business. I had to carve out time to do that, growing other business, before the poker chip business died, basically. It was forced upon me, be efficient or you're going to die here, and you're going to have to go back into the corporate world. That was basically it.

Eric: Right, and I think you've carried that culture into being efficient into your workplace now. How is your company organized today?

Stephan: When we started this company, Tower Paddle Boards, it was the first company where I had to hire employees. About 9 months into it I had to hire my first employee in any business. Then we were on Shark Tank 6 months later. Things just really took off, so I had to scale with a lot of employees. I was still working this ... It wasn't a strict 3 days a week, 4 hours a day. Now it was we were in startup mode. I was coming into the office, getting my work done, and getting out of there. We were a startup, so the expectation was that everybody that came to work for me would work 50, 60 hours a week. Hired them right out of college, and not paying them much. We were going to drive this thing forward. We were able to grow the company pretty quickly like that. I was trying to instill the same values. I'd literally hand them a copy of The 4-Hour Workweek to



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everybody that came to work here and say, "We have a small team. We don't have a lot of cash behind us. We've got to figure out how to do things better." That's what we did. From the beginning we were.

Then a year and a half ago I made this formal within this company. We're a beach lifestyle brand, so we sell paddle boards. We tell people, "Look, you're working too much. Get out there, have fun. Enjoy your friends, your family. Enjoy the outdoors," and here we are working like a startup. We decided we're going to basically live our brand. I was already doing this. I came in on June 1, 2015 and said, "Okay, everybody. We're going to do a 5-hour workday, straight through. There's going to be no lunch. You're going to work 8am to 1pm. Then we're going to get out and we're going to enjoy our lives." Everybody was on salary, and we rolled out 5% profit sharing at the same time. The net effect of this was it nearly doubled everybody's per hour earnings overnight without any increased cost to the company because we were just basically reducing the baseline of hours that this was required.

Everybody was told, "Here's the new deal. You're getting your life back. Your workweek is now better than most people's vacation week because you have 1:00 in the afternoon till 10:00, 11:00, whenever you go to bed, every day of the week. Then you have your weekends. The ask is that you need to figure out how to get as much as you were doing before. If you can't, you'll be fired."

Eric: Wow, okay. How are you holding people accountable? How are you tracking people? There's a lot tied to ... You have profit sharing, and then people are working less. How are you holding people accountable?

Stephan: It was a big gift to everybody, and then it was a big ask. My theory before is that corporate America is really getting about 2 to 3 hours of work done, yet we're spending 8 to 10 hours in the office. How we track productivity is really in broad strokes. How profitable are we? The year before we did this to the year after we did this, our revenues grew 42%. All of a sudden we're working less and we're making more money. Our profits were up, I think it was 31%, profits as a percent of revenue. Even more if you just look at net profit. All the metrics were going in the right direction, we were just working less.

I think what has happened and why entrepreneurs like myself are able to thrive in the current economy is because in the information age there's been this revolution of productivity. It's not an incremental increase in productivity, it's a 10x change. What's happened in corporate America is in the past 40 years productivity in the US is up 80%, and wages are up 11%. A lot of people would look at that and say workers are getting screwed here. Productivity is up 80%. You're only getting 11% of increase in wages. I look at that as an entrepreneur saying, are you crazy? Productivity is only up 80% in the last 40 years? If I look 30 year ago, and I go into my mom's office, and she managed a credit union, a bank, and she was the top person there, her desk had a typewriter and a phone that was attached to the wall. That's just insane what we can do now. Everybody has a supercomputer in their pocket, we've got internet access, we can look up any piece of information, we can Skype across the world. There's all kinds of productivity



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tools.

I wrote a book on the 5-hour workday. There's an associated website called fivehourworkday.com where you can get the first 50 pages of the book for free. You can also download a 30 to 40 page PDF that lists all of these productivity tools that we've identified at Tower, that I've identified over the last dozen years and my staff has identified. These are things that can save you millions of dollars and years of time. These are productivity tools that nobody is using. These are free or very cheap in a lot of cases.

By constraining your workday, it basically forces you to go out and find these productivity tools that nobody else is using. Entrepreneurs and independent workers are thriving in today's economy because they're being rewarded by how much effort they put in and what the output is of that. They're not being managed by the clock. They're identifying these productivity tools. Their productivity is up 10x. The average worker, productivity is up 80% over the last 40 years. I as a boss am pissed off about that. Why are you guys wasting your time and my time in the office? Let's work at a faster clip, figure out these productivity tools, and it's a better deal for everybody.

That's what this experiment is about. It's based on the hypothesis that the real amount of work getting done out there is 2 to 3 hours of work a day, and yet we're spending 8 to 10 hours a day. The working hours are getting longer and longer and longer, making people miserable. It's not helping the business. Cut the nonsense. Let's go down to a 5-hour day.

Eric: If you had to pick only one productivity tool, what would it be?

Stephan: Dropbox is a great tool. Just the fact that all your files are accessible online and then accessible from your phone, from your laptop, from your desktop computer, it makes you productive not just in your office. It used to be you go away on vacation, you fall behind, or your computer crashes, you've got to get new computer and you've got to move all your files over. A lot of people use Dropbox of course, but there's a lot of people that don't. Just that ability frees you up to work anywhere. That instantly raises productivity.

The reason productivity is up is essentially the assembly line of today that has been invented in the last 30 years is the assembly line of information, of moving information around. It's gotten much quicker to move information around. You want to work a little bit every day moving that information around. If you can field an email on your phone at night instead of waiting till the next day, 12 hours later, that moves that piece of information along, especially if you're dealing with people overseas. The faster that information flow goes, the faster your productivity goes. Anything you can do to do stuff like that will help.

Eric: Love it, okay. What's working for you guys in terms of customer acquisition today? What's the most effective thing?

Stephan: We use search engine optimization. The first 3 years of our business we didn't spend a



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dime on advertising, and it was an intentional move. We were growing so fast that we really didn't need to advertise. We weren't like a lot of companies who went out there and said let's go do Facebook ads, let's go do pay per click, online companies, or even advertise in magazines, because we want to figure out how to get this traffic for free. If we can figure out how to do that, we'll have created a hack.

Again, and this is in terms of money, you've created a constraint, and constraints breed creativity. This is why 3 guys in a garage in Silicon Valley can upset a $100 million company that has 100 or 500 workers and millions of dollars to throw at projects. In today's age, you almost bet on the 3 guys in a garage every time because the larger companies don't have the constraints of time or money, so they're not looking for these creative solutions. They're not forced upon them. These 3 guys, they either die or they find a creative solution. When they find that creative solution, it disrupts. It becomes their competitive advantage. That is in the startup world, but these restraints or these limitations can be set on time as well as money. Constraints are a good thing in the startup world. That's really what we're doing with the 5-hour day as well. That's how we did with no advertising when we started the business.

Eric: Great. A lot of people who listen to this are from the tech world. Obviously they're familiar with advertising and just pouring gasoline on the fire to grow things. People don't often talk about SEO. I'm just curious, on the SEO portion, not a lot of people ... Same thing, they don't talk a lot about link building. How are you guys acquiring more links? How did you acquire links in the beginning to rank higher for certain keywords?

Stephan: It's a pretty basic process. You basically have to have some compelling value proposition. Search engine optimization has boiled down to PR now. If you want to do good PR, the first thing you have to do is you have to have a story. You have to have something that is compelling to talk about. If you don't, it doesn't matter how good your PR team is. It's just not going to work. It's the same thing with marketing. If your product is an unnotable piece of crap in general, or just ho hum, it doesn't matter how good your marketers are. It's going to be an uphill battle the whole way. Now on the other hand, if you figure out some incredible value proposition or some incredible product, the marketing does itself.

The first thing is we identified the paddle board market. These boards were ridiculously expensive. It was like why don't we just cut out all these chains? We'll go direct to consumers. We'll give them the same product for half price. That's a good value proposition. That's a noteworthy value proposition. It's not unique to paddle boards, obviously. Everybody is going direct to consumer now, and that's the chunk of retail that is growing while traditional retailers are shuttering their doors. You have that value proposition, and then you create a lot of content about that. You basically tell your story, and then you go out, articles are published about that story and get linked back to you. Great product, write about that story, and then go get links.

Eric: Can you give us an example?

Stephan: A good example is The Five Hour Workday book. It wasn't my intent to write a book



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called The Five Hour Workday. I was just going to roll out the 5 hour workday in my company because we were using this as a recruitment and retention strategy for our employees. I occasionally write articles in Inc. Magazine, or Fast Company, or Mashable. I wrote an article on what we were doing, just our 5 hour workday. We're doing this little experiment, a 3 month experiment in the summer, and we're going to roll back in the fall. I wrote that article for Mashable and it got 15,000 social shares, which is a lot. Usually an article that I'll write will get 50 social shares if it's a great article.

This resonated with people. I know we had something that was, people want to talk about this. This is of interest to people. There is a huge discussion about work-life balance in America. 80% of workers are basically unsatisfied with their job. The idea of compressing that workday really appeals to people. I think people in general just understand this concept that yeah, we're getting about 2 to 3 hours of work done in a 10 hour day, but who cares? They should be pissed off about this.

I said, "How do we maximize this from a marketing standpoint? Write a long form book on the topic, really explain what you're doing. We're going to put a book in every paddle board that we sell. We'll get 10,000, 15,000 of these out there into circulation. Word should spread. People will write stories about what we're doing." That's exactly what we're doing. We sort of backed into this. It was very opportunistic. That's not even the product that we sell. That's just, "Hey, here's what we're doing. This is of interest. You guys should hear about this." It's getting a ton of press and links, and it's really telling our brand story very authentically.

Eric: Love it, yeah. Interesting story, interesting title as well. It's sure to be a hit. I want to shift over to your Shark Tank experience.

Stephan: Sure.

Eric: I remember watching that episode. Why don't you talk about that a little bit?

Stephan: I'm known as the worst pitch in the history of Shark Tank that still landed a deal. Actually Shark Tank called me out of the blue because we were a paddle board company which was a hip, hot sport back at the time. It still is, but it was really trending right then. We did it differently than everybody in the industry. When you went to our website, in 5 seconds you could figure out what's their value proposition. They sell direct. This is why you're getting screwed if you go to the retailer. Shark Tank producers were looking for a paddle board company, they found us out of the blue. When everybody else is applying to be on this show, they're calling us. That wasn't the first time that's happened to me. With the poker chip company, because it was a trending sport, media reached out to us as well. This is another part of the idea of SEO and link building. Have something compelling that people are willing to talk about, and those people will come to you a little bit.

Anyway, I'd never even seen the show when they called. They said, "Hey, it's on ABC on Friday nights," and I said, "Okay, this is a no brainer. I'd love to go on to it." I went up to LA. I was sequestered in a hotel for 4 days when you're going and you're pitching to the



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production team or whatever. 2 days before I went on, I learned that Cuban was going to be on the show. It was season 3, so that was the first year he was on the show as a guest shark. I thought, I didn't really even know who these other guys are at this point, but I know who Mark Cuban is, so he became my target.

Anyway, the day goes that I'm supposed to go in there to pitch to the sharks. I walk on the stage, get through about a minute of my spiel, go to my slideshow, the clicker button shoots through all the slides. I freeze up, and it's this epic freeze online where I'm silent. Then I try to start again, and I'm stuttering and stammering. The sharks are making fun of me. I get called a nerd. I get called a leprechaun. They're just tearing into me.

Eric: By Kevin?

Stephan: Yeah. This is all ... It's live. What you see on TV is basically a highlight film of what really went on. You'll go in there and pitch for an hour or hour and a half, but it's not like, "Hey, let's do a retake. You screwed that up." You either run out of there crying, or you gather yourself and you come back. That's why you see a lot of people sweating on that show because they just let them sweat it out.

I had to regroup and battle back. I ended up getting a deal from Mark Cuban for $150,000 for 30% of my company. In addition to that, he negotiated for first right of refusal to invest in any business that I raise money for in the future. That was a first in the history of Shark Tank. He didn't even really like the paddle boards, but he's like, "I like the SEO strategy this guy's going into businesses with. He can probably do this with other stuff. I'm going to bankroll him." To me, there's no downside to that, only if I raise money. I could do something else on my own if I want. Don't have to include him, but if I raise money, he gets to trump that offer if he wants. I took that offer. I was just happy to get any offer after the whole debacle to start this thing.

When I made that pitch, when he invested we had $100,000 in lifetime sales for Tower Paddle Boards. Since that pitch we've done over $20 million. That makes us one of the best investments in the history of Shark Tank.

Eric: Wow, okay. How did it feel? You talk about a lot of people sweating all the time, and you stuttering and all that. How did you feel at that moment? I'm just trying to get an idea of what was going on inside your head.

Stephan: The funny thing is I wasn't nervous going on there. I've done a lot of public speaking. That doesn't bother me at all, but I have a horrible memory. When you go on Shark Tank they want you to memorize this 2 to 3 minute initial pitch. They always sound really cheesy. They want you to hype up and do something entertaining, and they get a little laugh out of it. That's just not me. I'm not an entertainer. I was horrible at that, and of course I forgot my pitch in the middle of it because I stumbled a little bit. In that moment I'm just like, "Oh my god." It was almost an out of body experience. You just blew it on national TV. Then I'm thinking, because I had a son at the time that was 5 years old, I'm thinking, "Oh my god, he's going to see this. His friends are going to make



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fun of it. You need to pull this together. You're embarrassing your family, basically."

I was able to gather myself and start fighting back. I got a little pissed off. I'm like, "Look, you guys clearly don't even understand the paddle board market. Here's why you need to invest in me." I even pivoted a little bit and stopped pitching the paddle boards and started pitching the idea of just doing a business flipping business where I would go in, we'd buy a $10 million business with a war chest of cash, I'd inject what I knew, and then we'd flip it and sell it for $30 million a couple years later. I'm like, "I've done this for all these businesses. I can do it for any business out there." That's really what ended up getting the investment.

As it turns out, the paddle boards was a very good business. 2 year ago we were named the fastest growing company in San Diego. It's a town of about 3 million people. We're a surf company. We're a surf company with 5 people in it, and we're doing $5 million in revenue. We're at this awards ceremony and they're counting down the fastest growing companies, a lot of VC funded companies and tech companies. This goofy surf board company is the fastest growing company. We've done it all.

Eric: Great, great. What's it like working with Mark Cuban?

Stephan: It's been very good. The reason why when I heard that he was on the show that I was instantly, "Okay, this guy's money is worth 3 times everybody else's money," is because he was a celebrity that I knew. I looked at this as less about getting a $150,000 investment and more as getting basically a free celebrity endorsement. You do due diligence after the show. A lot of the deals fall apart because you can go on there and just lie about your business. They don't know. It's all live on air. When they do the due diligence, probably a lot of deals fall apart. When we did the due diligence part, I was like, "Look, Mark. I want to put your face on the homepage of my website. Are you good with that?" He's like, "Yeah, I haven't got a problem with that." That's really what I wanted. Almost the check with Mark Cuban's name on it was worth more to me than the $150,000 to cash it because it's a celebrity endorsement. It instantly takes our brand, which was completely unknown at the time, and gives it some legitimacy.

Eric: Got it. That part totally makes sense. My understanding also ... We've also had other Shark Tank guests on the show before. My understanding of Mark, the way he works, is that he has a team that helps out. Can you talk about that a little bit?

Stephan: Yeah, he does have a team. Honestly, we don't use his team very much. It's direct communication to him with me. It's all email communication. I report to him about once a week. If I have any questions, I can go right to him. He does have a web guy, and you can use his accountant or marketing guy. Honestly, we do most of that stuff in house. We don't leverage his team probably as much as we should. We're doing fine on our own.

Eric: Got it. All right, great. Wrapping up here, I've got a couple more questions. We talked about Dropbox a little bit. What's one tool that you added in the last year that has added a lot of value to your business?



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Stephan: We added some HR tools. As we're starting to hire people ... HR in a small company, you don't have an HR department. Anything you can do to speed up that process, because basically it just took about half of my time for a month every time we hired somebody, posting on Craigslist, sort through 100 resumes and all this stuff. We use Recruiterbox, is a great tool for that. It just is a much easier way to manage the hiring process among a team. It just automatically brings all the people in. That's a great tool that saves a lot of time. I think it's free, or it's $30 a month.

Then we use Zenefits. It's almost like a central portal of information for all your 1040s, your health coverage, all of that crap, all the paperwork that you usually have to do when you hire somebody on, or when they get married, or when they change something, or you change their salary, or any of that crap. It gives them an account within this, and they just self-serve, enter their own information. All your documents that you have to have them sign when you hire them on are all in there, and they control it. You just load the thing up and then you go boom, this person's hired and it puts them through a series of things. If they move, they change the information in there. They elect what healthcare they want on there. It just makes that process seamless. You don't need an HR department, really. That's been wonderful.

Like I said, honestly you should go to the website, fivehourworkday.com, and get that PDF of these tools. We put the secret sauce out there of these tools. There's one tool called Panjiva.com. Have you ever heard of that website, Eric?

Eric: No.

Stephan: This is a sourcing tool. In the old days people used to fly to China and take 3 years and hundreds of thousands of dollars to identify good manufacturers and get their product all dialed in, quality and everything. Then came along Alibaba. That connected overseas manufacturers with US companies. That was great. That was the biggest IPO in the history of the world when it went live, I believe, so a very valuable company. The problem there is if you want to make paddle boards, you go onto Alibaba, you type in paddle boards and it gives you 2,000 responses of people that claim to be factories that will make this. Half of those are fraudulent, scam artists, maybe 5 of them are good factories, maybe 15 of them are bad factories, and the other 450 are some kind of middle man. Not really information because it's information overload.

What Panjiva does, it attacks this problem in a little different manner. Since 9/11, anything that comes into the country in a container, it's public information on what the weight of that was, a brief description of the contents, where it came from, address, company name, and where it's going to, address, company name. You can put in paddle boards and it'll tell you all the paddle board shipments over the last 5 years, and if they're going up or down, what factories they're coming from, what customers they're going to. You can zero in on a factory and then see who all that factory supplies. It tells you this data over time. It's not perfect information because this is scribbles on a bill of lading, but it's pretty good information.





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You can basically determine ... You get a quality score on a factory. If you know they're providing some of the best brands in the industry and their shipments are going up, that's a good factory. If their shipments are going down, or they used to ship to one company and now they no longer do, they're probably a factory that raises a red flag. You can even put your competitor's name in there and see who all the factories are that make all their different products. It's magical information. This site has been around for 10 years. I'll go and I'll talk to universities, and even procurement departments, and these students have never heard of this. I'm saying, "Are you guys kidding me?" I can literally source in 2 to 3 hours in the afternoon what used to take people years and hundreds of thousands of dollars and 5 trips to China.

Eric: Whoa, that is huge. We're definitely going to drop that in the show notes, and then we'll link to the PDF and all the resources that you have for sure. I guess another question would be ... You've talked about your book already, but besides your book, what's another book that you'd recommend to everyone?

Stephan: In the book I recommend The 4-Hour Workweek. Obviously the title is an homage, some would say a copy. The 4-Hour Workweek was really about entrepreneurs, how to escape from the corporate world, and how to apply the 80/20 rule and management by absence. It's a lot of the tools and the techniques. What my book is, is really about how the work world had changed. It's sort of a history lesson on how work has evolved in the world and how we can work differently today. It's very counterintuitive when I tell people that we work a 5 hour day, and we're growing faster than you. People don't believe it.

If you realize that if you put this constraint on, it forces you to identify better ways to do things and better tools. You identify Panjiva if you're a sourcing company and you only have 5 hours to source with one person. If you have an entire sourcing department and you do stuff the old way, you're still spending hundreds of thousands of dollars, 5 trips to China, and years to source stuff. You're a fool because this has been around for 10 years. There's no incentive to find this information. This puts out the argument of how we can basically change our entire workday for an entire company, an entire economy, and why this works. It basically just covers the experiment that we're doing in our company.

Eric: As a marketer myself, I have to call out that the way you answered that question was very smart from a PR perspective. I have to give you applause there. That's about it for questions. This has been fantastic. I definitely want to thank you for sharing your experiences. What's the best way for people to find you online? What's the resource that you've been sharing with everyone?

Stephan: Sure. Anything about the book, you can go to fivehourworkday.com, and you can contact me through there. I'm pretty accessible by email. Our paddle board site is towerpaddleboards.com. With our beach lifestyle company, we also have an online magazine. We've got about 50,000 subscribers to that. You'll get 2 emails a week. It's videos and articles, anybody that would be interested in a beach lifestyle. That is at tower.life. Those are our main properties.



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Eric: Awesome, great. Stephan, this has been awesome. Hope to connect with you again soon.

Stephan: All right, Eric. Thanks for having me on the show. I appreciate it.

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