Industry: Consumer & Lifestyle
Co-founder and CEO Steven Sashen turned a build-it-yourself sandal line into a multi-million-dollar brand with rubber, string and some seriously bold moves.
All-American gymnast Steven Sashen didn't start running until he was 45 years old, when he began competing in the USATF International Masters Circuit. By 2007, though, Sashen's running-related injuries were piling up, and a friend recommended that he run barefoot. "He said I might learn something," Sashen recalls.
Sashen quickly "discovered the benefits of natural movement," he says, and found literature to corroborate his hypothesis that big, padded shoes don't actually help with running. The sprinter also learned about the tire-scrap-and-leather huaraches worn by Tarahumara Indians in Mexico, and decided to make his own version of a 5,000-year-old running sandal -- first for himself, and then for friends.
Two years later, Michael Sandler, the author of Barefoot Running, encouraged Sashen to make his accidental business official. "I came home and pitched it to my wife, who said, 'No.' By 10 o'clock that night, I had a website up and running," Sashen says.
"That first year and a half, we cut big sheets of rubber into smaller pieces, and sold the stuff with lengths of rope as a DIY shoe-making kit," explains Sashen.
He and his wife, Lena Phoenix, quickly sold 15,000 kits nationally and internationally. "It just took off," as Sashen puts it.
The duo worked from a corner in a spare bedroom until business spilled into the dining, living and master bedrooms and the garage. Sashen says, "We finally moved to an office, and continued to sell do-it-yourself kits for the first four years of business."
At that point, he continues, "There was no choice but to go overseas." Some of the products Xero manufactures cannot be made in America; others could be made onshore, but only "if we went to an aerospace manufacturer and paid four times as much," says Sashen.
With offshore manufacturing, people tend to assume the worst. "That's not the reality, especially in industries like this," Sashen clarifies, offering, "We work with factories that manufacture for DKNY and Berkshire Hathaway, and they've done very extensive analyses on sustainability and ethics." Likewise, Sashen personally checks in on production at least five times annually.
Xero's bread and butter is its rubber soles. The materials -- FeelTrue rubber and webbing -- aren't particularly special, he says, "but we're making them in unique ways, with performance characteristics others lack."
The resulting ultra-light shoes come with a 5,000-mile warranty. "Some customers are still using the same shoes from the $25 dollar kit they bought five years ago," Sashen says.
That's a bold claim. But, then again, Sashen's business itself -- making running sandals -- is bold. And in 2013, Sashen and Phoenix made another brave move when they kicked a $400,000 dollar investment offer to the curb when they appeared on Shark Tank.
"Kevin O'Leary wanted half of the company, and the valuation was ridiculous," Sashen recalls. Being on the show, though, boosted advertising: "We did about three months worth of sales in the week following the show," says Sashen.
The company still sells its debut DIY kits, along with four ready-to-wear sandals; this year, it'll gross around $3 million. "Next year we're projecting $12 million," Sashen says, revealing plans to expand into closed-toe shoes with a casual canvas performance shoe he's rolling out later this month.
Three more designs will be released in spring of 2017, and, Sashen adds, "In 2018, we have five products we're looking to launch." Like his sandals, Sashen's shoes will give users the feel and feedback of barefoot running.
Xero shoes are sold predominantly online, but that will shift in the coming year, as the brand inches into about 50 U.S. stores and 100 international retailers.
Challenges: Managing explosive growth has been the biggest obstacle of all. "The financing we need for inventory purchasing alone is a huge challenge," explains Sashen.
Opportunities: As Xero Shoes rapidly expands into retail, Sashen sees an opportunity to partner with big names and expand exponentially.
Needs: "For any growing company it's the same thing: cash and people," says Sashen. He's currently looking for talented employees who are able and willing to work in a startup situation, and he's working on raising the funds needed to support his company's projected growth.