How Xero Shoes designed the world’s most comfortable shoes

In your own words, what does your company do?

At Xero Shoes, we design, manufacture, and sell (online and offline, direct and through worldwide retailers and international distributors) lightweight, barefoot-inspired, casual, and performance shoes, boots, and sandals.

Xero Shoes are so comfortable, people have actually gone to bed with them still on because they forgot they were wearing them.

People in over 100 countries wear Xero Shoes for almost every possible activity, from taking a stroll on the beach, to climbing Kilimanjaro, to competing in the Olympics, to a night on the town.

📈 Monthly revenue: I’m not legally allowed to share this as we’re an SEC reporting company after doing an equity crowdfunding raise in 2017. I can share that our 2021 revenue was $33.6M and that in Q1-Q2 2023, we were up 60% YOY

📈 ~% Churn: N/A

📈 ~% Net profit: ~11% in 2021

📈 Funding: We raised just over $1M through equity crowdfunding. In 2020, TZP Group invested $12.5M for a minority position in the company

📈 Initial cost/investment to start the company: We launched the company for basically nothing. Just a few thousand dollars for our initial inventory

📈 Number of team members: 72 approximately 

📈 Number of founders: 2. Myself and my wife, Lena Phoenix

📈 Started: November 2009

How does the company make money?

💰 Simple. We put the world’s most comfortable shoes on people’s feet and they pay us for them 😉

💰 Our price points range from $19.95 for a DIY “barefoot sandal” making kit, to $170 for high-performance hiking boots and snow shoes, with most closed-toe shoes in the $89-120 range.

3 strategies that have worked to attract and retain customers? 

Youtube: I started the company by making videos not only showing how to make OUR sandals, but how anyone could source materials themselves and, essentially, copy our entire business model. Also, as a former professional stand-up comic, I made some comedic videos that have gotten millions of views.

Email: The biggest mistake I’ve made as a marketer is not starting to send out weekly newsletters sooner than I did. Email is a significant revenue driver for us, especially when we launch new products, which we do twice a year. 

Exit-Intent Opt-in Opportunities: The second biggest mistake I made is not implementing an exit-intent strategy. When someone is leaving our site (through the Back button, or moving the cursor to indicate they’re closing the tab our site is in), we give the visitor a chance to register to win a $100 gift certificate. This massively increased our email list. Had I done this when I first thought of it, rather than 3-4 years later, we could have had a list that’s twice the size it is now.

3 things that you’ve learned about hiring and retaining great talent?

My favorite question to ask when hiring is: “Tell me 3 reasons why we should NOT hire you. And they have to be REAL reasons, not something glib like, ‘Well, if you don’t want to double the size of your business…’.”

For example, if I had to answer that question, I’d say, “If you need someone with strong organizational skills, that’s not me. If you need someone to always act ‘professional,’ I’m not your guy. If you don’t have someone, or a team, to take the large number of ideas I come up with and narrow them down and produce them, you’ll be wasting your time with me.”

When it comes to retention, we offer both a profit-sharing-inspired bonus plan that pays out quarterly (when we have a profitable quarter, and sometimes even when we don’t), and a long-term incentive plan that rewards longevity (similar to having options, but without the tax hassles that options create). But, more, we constantly invite employees to pitch us on how they want to grow within the company, and, most of the time, we can accommodate those plans.

Ironically, the biggest lesson we’ve learned is how to let go of people who aren’t working out more quickly, rather than continually offer 2nd, 3rd, and subsequent chances for them to solve whatever isn’t working for us. We work with employees to jointly craft specific benchmarks or goals over a few months and if they cannot achieve them we end that relationship. 


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