From oilpatch layoff to successful entrepreneurial journey

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TRANSCRIPTION WITH SPEAKERS
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[00:00] SPEAKER_02: Welcome to Canada's podcast.
[00:05] SPEAKER_02: Hello, I'm Mario Toneguzi, Managing Editor of Canada's podcast.
[00:09] SPEAKER_02: Joining me today on Calgary's podcast is Sean Alexander, who is founder and president
[00:14] SPEAKER_02: of Kailani.
[00:16] SPEAKER_02: Thanks for joining us today, Sean.
[00:18] SPEAKER_02: Thank you, Mario.
[00:19] SPEAKER_02: Great to be here.
[00:20] SPEAKER_02: Well, let's start by just having you explain.
[00:23] SPEAKER_02: What is Kailani and what do you do?
[00:26] SPEAKER_00: Well, Kailani is a Canada's fastest growing outdoor lifestyle brand.
[00:32] SPEAKER_00: We started in, incorporated at the end of 2019, very end of 2019, and was really just a
[00:41] SPEAKER_00: small garage business that I had on the side, selling products, specifically paddleboards
[00:47] SPEAKER_00: out of my garage to my friends and neighbors in the new lake community.
[00:50] SPEAKER_00: And eventually we grew it now to three years, three years last month, and we've gotten
[00:56] SPEAKER_00: into over 100 skews related to obviously inflatable paddleboards, hard boards, rotomolded, hard
[01:03] SPEAKER_00: coolers, insulated drinkware, and just kind of everything that people use on a daily basis,
[01:09] SPEAKER_00: but with a little bit of a Hawaiian flair.
[01:12] SPEAKER_00: Oh, okay.
[01:12] SPEAKER_00: And so where are you sold?
[01:15] SPEAKER_00: So right now we're in well over 200 retailers across the country.
[01:20] SPEAKER_00: We sell online e-commerce and we also are on Amazon.
[01:24] SPEAKER_00: So those are our three target points.
[01:27] SPEAKER_00: And then we're sold to the business community in the corporate branded apparel market.
[01:32] SPEAKER_00: So we've partnered with a lot of promotional companies across the country in every province.
[01:38] SPEAKER_00: And they then sell our product branded with various companies logos on them.
[01:43] SPEAKER_02: So tell me just a little bit about the genesis of this.
[01:47] SPEAKER_02: How did this all come about?
[01:50] SPEAKER_00: Well, as I had mentioned, this was really just a side, something on the side for me.
[01:56] SPEAKER_00: I moved into a lake community, built a home, had my family there, and I was looking to
[02:01] SPEAKER_00: just make a little extra money on the side of my only gas career.
[02:04] SPEAKER_00: I was downtown Calgary for 15 years in the only gas sector.
[02:08] SPEAKER_00: And this was just a side gig, something fun.
[02:12] SPEAKER_00: I created a name being Kailani at the scene sky and I was importing power boards from overseas
[02:20] SPEAKER_00: to certain specifications that I put forth and found a great factory to work with was
[02:26] SPEAKER_00: importing these products and then selling to my neighbors.
[02:29] SPEAKER_00: And at the end of the day, I realized that I'm not going to get rich selling power boards
[02:35] SPEAKER_00: because not everybody wants to be on the water.
[02:37] SPEAKER_00: And what other products could we come up with that the consumer would see value in, especially
[02:42] SPEAKER_00: if we were 25 to 30% less than the retail price point of the big brand out there that we
[02:48] SPEAKER_00: all are familiar with or the multiple big brands.
[02:52] SPEAKER_00: And so that's really our strategy is better pricing for the consumer.
[02:58] SPEAKER_00: And on the retail side, we still have great retail partners where they make great margins.
[03:02] SPEAKER_00: So we try to handle everything from cradle to grave here.
[03:05] SPEAKER_00: We do everything from the design, importing, warehousing distribution, all out of Calgary.
[03:10] SPEAKER_02: So it was just kind of bizarre, right?
[03:13] SPEAKER_02: Yeah, when you think about it, right?
[03:15] SPEAKER_02: Calgary is not known to be like a water resort type area.
[03:20] SPEAKER_02: And you can talk a little bit about that if how a business can do so well in Calgary despite
[03:29] SPEAKER_02: our lack of water, I guess.
[03:31] SPEAKER_00: Well, I think the Alberta and the discretionary spending that happens here, everybody is very
[03:37] SPEAKER_00: out. A lot of people are very outdoorsy.
[03:39] SPEAKER_00: So we've got, you know, we're nestled up to the Rocky Mountains, as you're where you live here.
[03:43] SPEAKER_00: And, you know, we like being outdoors, family and friends.
[03:48] SPEAKER_00: And we have discretionary spending that can afford some of the luxury lifestyle products.
[03:53] SPEAKER_00: And so geographically, we're definitely not the center of Canada.
[03:58] SPEAKER_00: So from a shipping point of view, it takes a little bit more to get it out east.
[04:02] SPEAKER_00: But we're represented in really every province and selling online.
[04:08] SPEAKER_00: And I think we've got a great story of affordability for consumers.
[04:15] SPEAKER_00: Yeah.
[04:15] SPEAKER_02: Now, you're in many ways, you're kind of like the prototype of the story of the oil and gas
[04:23] SPEAKER_02: worker laid off, but becomes success as an entrepreneur, right?
[04:27] SPEAKER_02: We hear that story quite often.
[04:29] SPEAKER_02: Why do you think some of you guys in the oil patch that move on becomes successful as entrepreneurs?
[04:38] SPEAKER_00: I think, you know, I'll attribute this back to actually the last oil and gas company I work for.
[04:44] SPEAKER_00: They had put their entire business development team around the world through some very,
[04:51] SPEAKER_00: very solid business planning because as salespeople and business development managers related to products and services
[04:57] SPEAKER_00: that we would sell to the oil companies that really particular wealth for instance,
[05:02] SPEAKER_00: we've got to understand, you know, the business side of how much inventory they have to buy,
[05:08] SPEAKER_00: how much do they have to warehouse, how quickly is the cash cycle?
[05:12] SPEAKER_00: So these oil companies sometimes put their salespeople through these, these schools,
[05:16] SPEAKER_00: these, these intense courses, which are really like, you know, one week fast track MBAs on how to
[05:22] SPEAKER_00: understand the business and put a business case together on how can we make in the oil patch?
[05:26] SPEAKER_00: And I just took all of those learnings and applied them to something fun that I was selling out of my
[05:31] SPEAKER_00: garage. And it happened to be very soon after I actually was put through some of that training.
[05:38] SPEAKER_00: And then I was laid off and I thought, you know, I can take everything they gave me in the oil
[05:42] SPEAKER_00: patch and apply it to this and be successful in it if I, if I dot the eyes and cross the
[05:49] SPEAKER_00: T's and that's really what I did. So thank you to the oil and gas company that laid me off
[05:53] SPEAKER_00: in January of 2020 because you really made, you know, you, you, you are part of that whole
[06:00] SPEAKER_00: equation of how I was able to launch this quickly. You know what is funny? Your story resonates with me
[06:06] SPEAKER_02: because I was similar, right? Not in the oil patch though. You know, I was a journalist laid off
[06:12] SPEAKER_02: from the Calgary herald after many, many years and on my own now, but you know, when I look back,
[06:20] SPEAKER_02: I think the same way as you did it, but I didn't have that experience before me that lay the foundation.
[06:26] SPEAKER_02: I wouldn't be where I am today, right? So I guess it's a mindset, right? You know, when you look
[06:33] SPEAKER_02: forward as a business owner, like you've got that right mindset and positive attitude to move on
[06:43] SPEAKER_00: from from the past, I guess. Yeah, well, just like yourself, Marrow, you'd been in media for 40
[06:49] SPEAKER_00: plus years. You've been professional in the industry and, and you know, from my understanding,
[06:56] SPEAKER_00: I've read a lot of your articles and you've, you learn a lot from probably all the people that
[07:01] SPEAKER_00: you interview and you take everything somewhat like always attribute it. It's like an actor,
[07:07] SPEAKER_00: like an actor. They play so many roles and they research so many roles that, you know,
[07:12] SPEAKER_00: they become very intelligent in ways that, you know, only experience gets you. And so, I mean,
[07:18] SPEAKER_00: my, I always tell people, if you want to be an entrepreneur, try to be solving a problem, solve someone
[07:23] SPEAKER_00: problem with a product, for instance, and then that's half the battle. If you're solving a real
[07:28] SPEAKER_00: problem, but I also tell anybody that wants to be an entrepreneur, the best thing you can do is,
[07:33] SPEAKER_00: is try to do everything in life that you possibly can. I've, I've had a lot of jobs in my life and
[07:38] SPEAKER_00: learned a lot from every single job, career, position that I've ever had and taken the, the best of
[07:46] SPEAKER_00: those things and applied them to the next job. Yeah, and I think that's counted. So Sean, you and,
[07:53] SPEAKER_02: and I think it was November, appeared on Dragon's Den and were successful there. Tell us a little
[07:59] SPEAKER_02: bit about what happened and, and the outcome from that experience. He great and I great, great trip.
[08:08] SPEAKER_00: Obviously, if you watch the episode, I got a little teary eye. You know, it was a great experience.
[08:14] SPEAKER_00: It was actually my second trip to Toronto for filming a Dragon's Den. I was on the show in
[08:18] SPEAKER_00: season two and six, I didn't, didn't, I wasn't successful in, in getting an investment from the
[08:24] SPEAKER_00: Dragon. Dragons and I came back to the old patch and went back to work and started focusing on,
[08:29] SPEAKER_00: on that career. But going on the Dragon's Den with Kailani was first of all, bringing it through
[08:34] SPEAKER_00: 2500 to 3000 people who audition across the country is a, is a feat in itself. 150 people are so
[08:42] SPEAKER_00: get sent to Ontario for taping, but only about 120 from my understanding what the producer said,
[08:48] SPEAKER_00: actually make it on the air. So you've got to make it through all of these checks and balances.
[08:52] SPEAKER_00: It's got to be good TV. At the end of the day, it's all about good TV first and the Dragon
[08:57] SPEAKER_00: are there to find opportunities, right, with their own working capital. And so we were successful
[09:03] SPEAKER_00: in landing Mr. West Hall on the show with a, with a deal where he had offered us 15,
[09:11] SPEAKER_00: sorry, $500,000 for 15% equity in our company, as well as a further operating line to
[09:18] SPEAKER_00: grow our inventory in the US and Canada of a total of another 500. So you could kind of say it's
[09:25] SPEAKER_00: a million dollar deal. Very pleased with how things went. You get picked apart on there. So you've
[09:31] SPEAKER_00: got to be willing to, you know, it can be, you know, you might be on camera taping for probably an
[09:40] SPEAKER_00: hour or so or more. And they really, you've got to come in with your numbers. You've got to have
[09:44] SPEAKER_00: a good valuation. You know, sometimes it's better to be conservative on the valuation. And if you have
[09:52] SPEAKER_00: your numbers and you've got revenue, revenue is the key, I always say is, because if you've got
[09:56] SPEAKER_00: revenue, not just an idea, but you've got revenue and you start to how you execute it, it's really
[10:03] SPEAKER_00: up to them to decide if you're, if you're worth betting on. That's what it's about. They're betting
[10:07] SPEAKER_00: on you as much as they are on the product. What were you a little nervous going on?
[10:12] SPEAKER_00: I was, I wasn't nervous. I would say I tell my wife that I, I don't like writing down things
[10:20] SPEAKER_00: on notes and I needed to have everything in my head because if you don't know your numbers,
[10:25] SPEAKER_00: they're going to catch you. And so you've got to know, you've got to know your product and your
[10:30] SPEAKER_00: strategy and the plan and tell them your story. And so it was stressful, probably more stressful
[10:38] SPEAKER_00: in most because I was there for the second time and this time I needed to come away with a win.
[10:42] SPEAKER_00: And my son was there as parents. We all want to give our kids, you know, someone to look up to.
[10:48] SPEAKER_00: So he was in the background watching. So that was emotional for me because I knew he was back there.
[10:53] SPEAKER_00: 11 years old now. And to be honest, I just felt honored to be there, but it was overwhelming
[10:59] SPEAKER_00: because I Christmas time broke my neck in Mexico. Oh wow. So I could have been, I was in the hospital
[11:06] SPEAKER_00: when I got back. We had to take a fairly quick emergency flight home. And I could have been in
[11:13] SPEAKER_00: a wheelchair standing sitting there in front of them. So I, I think my lucky star is that
[11:18] SPEAKER_00: was standing. I have recovered, but very could have been very tragic. So all those things,
[11:26] SPEAKER_02: it was emotional. It was a good emotion. Now I understand or if I read correctly, you also had
[11:33] SPEAKER_00: some some capital investment prior to this. Correct. When I initially set out doing this, I was
[11:41] SPEAKER_00: just simply taking out Kajiji ads and Facebook Marketplace ads. I load my trailer up and every
[11:46] SPEAKER_00: morning I'd have my coffee and I'd be on the road by, you know, 839. And those daily ads I was
[11:52] SPEAKER_00: posting with free delivery anywhere in the Calgary area. I had a garage full of coolers. And that was
[11:57] SPEAKER_00: the only way I knew how to market it. So I would just do gorilla marketing and put up, put up a pop-up
[12:02] SPEAKER_00: tent on a busy street corner somewhere at a market on the weekend and just sell them at a fairly
[12:09] SPEAKER_00: equitable price point that consumers res, that resonated with consumers. And so that's really how I got
[12:17] SPEAKER_00: started. It was doing that throughout the summer. And after a couple of successful, really successful
[12:23] SPEAKER_00: shipments, I called the friend of mine up and asked if he'd like to invest because my line is
[12:29] SPEAKER_00: a credit and credit cards couldn't fulfill potentially this big purchase order that I just
[12:34] SPEAKER_00: received through a large retailer. And so he introduced me to a couple of businessmen here in
[12:41] SPEAKER_00: Alberta that are at the time pseudo retired and had great business acumen. And these guys basically
[12:50] SPEAKER_00: we sat at the donut mill in Reddeer and gasoline alley for a few hours. And I pitched them my
[12:56] SPEAKER_00: business plan and projections out three years and what we could do now that we've landed this
[13:01] SPEAKER_00: large retailer. And I was asking for a million dollars. And within about two weeks we closed on that.
[13:07] SPEAKER_00: They gave me the working capital needed. And I then went out and set out and hired the
[13:13] SPEAKER_00: few extra people I needed to really take this and scale this. And so that's where we're at now.
[13:19] SPEAKER_02: I guess that's that's the key right? And you know a lot of people have ideas and
[13:27] SPEAKER_02: want to want to be entrepreneurs, etc. But man, it's it'll be tough slogging away if you don't
[13:35] SPEAKER_00: have that investment to give you that boost, right? Yeah, well I was lucky enough to like I said,
[13:43] SPEAKER_00: I have a very close friend that was already attached to this investor and and he knows I grind it
[13:47] SPEAKER_00: out. He knows I'm in the trenches and I'll do whatever it takes to I got to wake up at 4 a.m.
[13:52] SPEAKER_00: to make something work and work 15 hour days. I'll do it. So you know his recommendation and
[13:57] SPEAKER_00: referral to this gentleman that he knew and his partner. You know I think it just takes a lot of
[14:05] SPEAKER_00: grit. You've got to grind it out. Nothing nothing good comes easy. And you're not willing to put
[14:10] SPEAKER_00: the time. You you will get part time results. And so you know I needed out of probably a duty of
[14:18] SPEAKER_00: care to my family. I had to make this work because there were no oil patch jobs not going on my
[14:23] SPEAKER_00: door. We're talking in COVID the height of COVID 2020 things were shut down and so I either had to
[14:30] SPEAKER_00: make this work and scale it or I didn't have a livelihood. So that was really out of necessity.
[14:38] SPEAKER_00: You it sure puts a fire under your your back side. What a motivator isn't it? I did. And just like
[14:46] SPEAKER_00: you you turned your parlayed your 40 years into Canada's podcast now and you know you do it you
[14:53] SPEAKER_00: got to do and yeah. But you probably if you were making the millions of dollars through your
[15:00] SPEAKER_00: previous job and they didn't lay off you might have just sat back and just you know well I guess
[15:08] SPEAKER_02: sometimes you don't until your part you don't know what you're capable of right.
[15:14] SPEAKER_00: And I and I can say that I I was 15 years in the oil and gas sector and when you're doing well
[15:21] SPEAKER_00: but it's maybe not something that you love. You you might become a nine to five and show up and you
[15:29] SPEAKER_00: do the work and but you're just going through the motions and I've always since I was young.
[15:34] SPEAKER_00: I know this was again this was just
[15:40] SPEAKER_01: what happened part of my life that I turned into something I scaled it but I never thought of
[15:45] SPEAKER_00: starting an outdoor lifestyle brand. It wasn't even but I always did want to have my own company
[15:50] SPEAKER_00: start my own company of some sort where I wasn't working for another you know and so
[15:56] SPEAKER_02: now I was always looking looking for an opportunity. Yeah so you know Sean when you look at the
[16:03] SPEAKER_02: the early stages of the of the business what are you and being an entrepreneur what would you say
[16:08] SPEAKER_00: your biggest challenge was. Two biggest challenges I think you know understanding that we had two
[16:17] SPEAKER_00: things happen in 2021 and 2022 and late 2021 we had a major high the Coca-Cola the the port of
[16:25] SPEAKER_00: Vancouver the Coca-Cola the highway we were completely washed out with the flooding that happened
[16:30] SPEAKER_00: there and that really put a put a real wrinkle in our plans of how much actually things cost to
[16:37] SPEAKER_00: ship because of that same shipping rates went through the roof because you also had around that time
[16:43] SPEAKER_00: the Suez Canal so container ships when you're importing exporting you rely on those shipping channels
[16:49] SPEAKER_00: and you know at one point we were you know for you know from a numbers perspective we were $4,500
[16:55] SPEAKER_00: USD for a typical 40-foot container to come from overseas into Canada and it went as high as 25,000 USD
[17:03] SPEAKER_00: for that same container in late 2021 to 2020 and into 2022 so it changes your business model you know
[17:11] SPEAKER_00: you're not making the margins anymore but we we weren't about to raise the prices on our customers
[17:15] SPEAKER_00: or our retail partners so we we we we stuck it out and eventually things came back down and
[17:22] SPEAKER_00: the roads were repaired in Canada here from the the torrential floods that we had
[17:26] SPEAKER_00: and so those are probably two of the biggest challenges to overcome at that point and they hit
[17:31] SPEAKER_00: us around the same time and you know it made us stronger for it because we we then looked at our
[17:38] SPEAKER_00: model and realized okay we can still be profitable still do well but we could just got to get through
[17:45] SPEAKER_00: this right yeah so a lot a lot of planning and looking forward every you know three to six months
[17:52] SPEAKER_02: yeah exactly and you know if if you had somebody you know
[17:58] SPEAKER_02: and say an old friend who's in the work together in the old patch who's just laid off
[18:04] SPEAKER_02: and wants to start a business what advice would you give them?
[18:09] SPEAKER_00: Coincidentally I've actually had quite a few people from the old patch you were still in the old
[18:12] SPEAKER_00: patch saying you know I like what you did how did you do and I I really say to them you know
[18:19] SPEAKER_00: the the product that I the products that we've developed now um you know we we're a lower price
[18:26] SPEAKER_00: point but find something you love find something find a product or a service that you love you know
[18:33] SPEAKER_00: if it's you're working in the old patch but you love carpentry how can you get into carpentry in a
[18:38] SPEAKER_00: way where you maybe you're making your own furniture you know maybe locally you're working with your
[18:43] SPEAKER_00: hands that's something that you love and um and then figure out how to make just enough to where
[18:49] SPEAKER_00: you're happy and then if it takes off then you scale it to where maybe you have other carpenters
[18:55] SPEAKER_00: that want to do the same thing and you grow from there but um you really got to find something
[19:00] SPEAKER_00: that you love doing each day because then it's not it's not uh it's not as much work
[19:06] SPEAKER_00: as there's a famous quote by Wayne Gretzky actually recently he had I've watched a podcast where he
[19:13] SPEAKER_00: he's always been asked by moms and dads you know how much training did you do to get to where you
[19:19] SPEAKER_00: are when you were a kid because you're thinking about little Johnny who's 10 or 11 or 12 or 13
[19:25] SPEAKER_00: and how much time should he focus and he says I never trained he was I just did something that I
[19:29] SPEAKER_00: love yeah and I just played I just played played played and that's what made him good so um it doesn't
[19:36] SPEAKER_00: it applies to the same thing in the business world as a business person yeah most do something
[19:43] SPEAKER_02: that you love won't seem like work yeah exactly yeah so um you know as you look forward Sean
[19:53] SPEAKER_02: what's the plans for the company and growth wise well we're excited about we've got some a couple
[20:01] SPEAKER_00: new patented products that we're going to be launching here I don't mind saying on your podcast
[20:06] SPEAKER_00: so this will be the first time publicly I'm announcing it but we have a patent pending on a new
[20:12] SPEAKER_00: collapsible pet carrier which is going to be pretty amazing so look for that in the new year
[20:19] SPEAKER_00: we're looking to launch that in the late spring and yeah it's going to fit right alongside our
[20:27] SPEAKER_00: our coolers and our colored drinkware and I mean everybody loves their pets and your pets are part
[20:34] SPEAKER_00: of your lifestyle you take them camping you take them hunting you take them fishing and so
[20:39] SPEAKER_00: they're they're going to get something pretty amazing to sleep in at night and um and it solves a
[20:45] SPEAKER_00: major problem on these shipping logistics and handling when they're collapsible so our retail
[20:51] SPEAKER_00: partners are going to love it are new and you know their storage managers of where they have the
[20:57] SPEAKER_00: store room and how much they can store so we've got that coming down the pipe for the new year we've
[21:02] SPEAKER_00: got some major partnerships we just announced so we're a national partner with the Canadian
[21:06] SPEAKER_00: Pro-Rodio Association so working with them and there are 1100 members across the country they're
[21:12] SPEAKER_00: athlete members and we're going to do some big things in rodeo so the Western lifestyle and rodeo
[21:20] SPEAKER_00: we see a synergy between how we are you know it's a very authentic true to yourself industry
[21:28] SPEAKER_00: they they got grits they grind it out they're hard workers and that's what we see our team here
[21:33] SPEAKER_00: at islandias and so happy to be part of the Canadian Pro-Rodio Association and and also branching into
[21:41] SPEAKER_00: golf so great things happening in the golf world and we're going to launch we've got some new
[21:46] SPEAKER_00: products coming down the pipe when we're in ash or we're a provincial partner with PGA Alberta
[21:52] SPEAKER_00: okay and so getting into the golf space where we're looking at expanding into the US and
[21:58] SPEAKER_00: hopefully we'll be attending a show in about a year with the PGA of America down in Orlando
[22:04] SPEAKER_00: and launching our product line down there when you look at the you know the business of being
[22:12] SPEAKER_02: an entrepreneur the time involved and the energy etc etc how do you find time to do what you want
[22:19] SPEAKER_00: to do and just relax you know it's I'm putting in 10-12 hour days most days
[22:28] SPEAKER_00: no longer than most but there's a light at the end of the tunnel and you know
[22:34] SPEAKER_00: you know we've all got a lot of us have children so you're you're shuttling them I feel like
[22:38] SPEAKER_00: a new driver after the after six p.m. I'm gonna turn into a new driver but I don't get paid
[22:44] SPEAKER_00: oh yeah we try to we spend weekends I spend weekends with family and obviously late weeknights
[22:52] SPEAKER_00: but not a lot of time for extra curricular activity it's I have only golf four rounds last year
[22:57] SPEAKER_00: I'd like to go but you know we got a we got a work work work to get that free time down the road
[23:04] SPEAKER_02: yeah exactly all right anything else you wanted to mention Sean?
[23:09] SPEAKER_00: just thank everybody that's been a part of our journey to get here whether it's our retail partners
[23:15] SPEAKER_00: you know distributors promotional companies that are we're working with currently and in the future
[23:20] SPEAKER_00: it's been great to work with you and then yeah just you know happy to be delivering a
[23:28] SPEAKER_00: Canadian brand to consumers at a price point that's palatable especially with these tough times
[23:35] SPEAKER_00: a lot of people watch their pennies and we're gonna try to help assist with that where you can
[23:39] SPEAKER_00: still get great things at an affordable price point so thanks again Mario for
[23:44] SPEAKER_00: for having me and the questions and maybe we'll run into you on the street in Calgary or
[23:49] SPEAKER_02: I'm sure we will at some point thanks very much Sean that was Sean Alexander who is the
[23:56] SPEAKER_02: president and founder of Kailani my Mario Toneguzzi managing editor of Canada's podcast
[24:04] SPEAKER_02: today with Calgary's podcast thanks for joining us