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Founder Stories: Yeti ❄️

Head West Team
Updated December 1, 2023

How the Founders of Yeti Ryan and Roy Seiders scaled from 0 to a $3.7B valuation

Of all the consumer companies started in the last 20 years, Yeti has built one of the strongest brands and achieved lasting success. Read this story to learn the true history of how brothers Ryan and Roy Seiders founded Yeti, and the playbook they used to scale to a billion dollar business.

Yeti's Tech Stack:

Ecommerce: Salesforce Commerce Cloud (US) Shopify (International) [read our guide to eCommerce platforms]

Buy Now Pay Later (BNPL): Klarna

AB testing: Monetate & Content Square

Site Speed: Yottaa

Customer support: ZenDesk [read our guide on Customer Support platforms]

Live chat: Ada support

Syndicated reviews: BazaarVoice [read our guide on Reviews Platforms]

Email marketing: Braze (US) Klaviyo (International) [read our guide on Email Marketing Platforms]

Personalization: CQoutient (US) & Nosto (International)

Heatmaps & Recordings: Crazy Egg (US) & Microsoft Clarity (International)

User Generated Content (UGC): Curalate

Customer Data Platform (CDP): Segment

First Party Data & Analytics: Snowplow

Landing Pages: Shogun (International)

Direct mail: Postie

History

Ryan and his youngest brother Roy were born in Driftwood, Texas, a town outside Austin in Texas’ Hill Country. Their entrepreneurial drive came from their father Roger Seiders.

In the mid 1970s, their dad was a shop teacher at a Houston area high school. He was also an avid fisherman (another passion he would pass onto his sons). He would design his own fishing rods and sell them on the side. He ran into a problem though. He couldn’t find a good clear coat to seal the thread wraps over the guides on the fishing rods. The existing options would crack under the stress caused by fishing (casting and fighting fish). He contacted an epoxy manufacturer and explained his predicament. They said they could make an epoxy that could work for him, but the minimum order quantity would be 100 gallons, and he was only using eight ounces a year on his rods. He decided to buy the 100 gallons of epoxy and sell it around Houston under the brand name “Flex Coat”. Fishing shops were selling out of his epoxy, and he realized he was onto something. He had never quit anything in his life, but he made the difficult decision to quit his teaching job and go all in on his epoxy business. That business still exists to this day.

Ryan Seiders, the oldest Seiders brother, graduated in December of ‘96 from Texas A&M and started a fishing rod company called Waterloo rods in early 1997. He worked full time on the company and lived in his hometown of Driftwood. He made specialty rods designed for grass fisherman. They were 7 ft 3 in. extremely stiff rods that were like a broomstick but lightweight. He would retail the rods for $175, and he sold 1,000 to 1,500 rods per year. He worked on the rod business for 8 years, but he could see that the business wasn’t growing, and it would be hard to get big enough to support a family.

He found an opportunity to sell the company in September of 2005 for what was a lot of money to him at the time - $185,000. Long term capital gains was only 15% at the time, and he was a self described “low roller” living in a condo in Austin, so the sale was a windfall. He was 30 years old at the time and decided to take the next year off to hunt and fish.

Meanwhile, Ryan’s younger brother Roy was also pursuing the entrepreneurial path. He graduated from Texas Tech 4 years after Ryan graduated. He started out selling a portable, foldable, shooting bench but that venture didn't go anywhere. Next, he started rigging out aluminum boats. They were designed to fish for Trout and Redfish in shallow water and equipped to his exact specifications. He always outfitted the boats with two coolers. At the time, he used Igloo coolers which would get beat up during fishing trips. Latches would break, hinges would get torn off, and the lids would cave in. He needed to replace these coolers after almost every fishing trip.

Ryan fishing with a competitor's cooler

Then, in 2002, Roy saw a heavy duty cooler in Florida that had just started getting imported into the US. Unlike the cheap coolers on the market at the time which were designed and optimized to be the lowest cost to manufacture, these coolers were heavy-duty, roto molded coolers.

The Idea

Roy wasn’t making much money in his boat company, and he realized the gap in the market these coolers were filling, so he shutters the boat company to become a distributor for the cooler company in the US. He sold this other company’s coolers from 2003 to 2006. In 2006, his brother Ryan, who had just sold his fishing rod company and was looking for something to do after hunting and fishing season, offered to help out in the warehouse packing and shipping cooler orders for $10 an hour. 

“We’d never seen anything like the cooler business for making money.” -Ryan Seiders Co-Founder Yeti

Roy was doing well distributing this other company's coolers, but he felt there were some design issues with the coolers. Roy is a product and design person and just like his custom rigged boats, he wanted to customize the coolers to his exact specifications. He also wasn’t able to get enough coolers from the manufacturer to meet the demand in the US.

The brothers decide to visit the cooler manufacturer in Thailand to see if they will make the design changes that Roy is looking for and increase the supply of coolers that they are getting. The two brothers from Texas book tickets for their first trip to Asia. When they get to Thailand, they meet with their contact, a middle man from Australia, and share their thoughts. They outline the ways the cooler design could be improved and explain how many more they could sell if they had more supply. They run into a brick wall. The Australian middle man had no interest in changing anything.

Dejected, Ryan remembers an email he received months earlier from another cooler manufacturer in the Philippines who’s making coolers for the Australian market. The brothers decide to leave Thailand where they aren’t getting anywhere and book an expensive ticket for the 3 hour flight to Manila in the Philippines. There they experience even more culture shock.

When they enter the country, they are required to sign papers where they acknowledge that trafficking drugs is punishable by death. After they get through airport security, they meet for the first time their manufacturing contact Ivan. On the way to the manufacturing plant, they are pulled over by young police officers with machine guns. In Manila, traffic is managed by license plate numbers. Even numbers can drive on some days and odd on others. Ivan, their contact, is driving with the wrong plates. After working through the issue, they finally arrive at the factory.

Unlike in Thailand, Ivan is willing to hear Roy’s feedback on cooler design and says that he can meet the manufacturing demand for coolers in the US. After a week, they flew out of Manilla and back to Thailand to catch their original flight back to Texas. As they are leaving Asia, they decided to start their own cooler company.

The launch

On the flight back to Texas, the brothers wrote down a list of 10 names for their new company. They can’t remember the other 9 names, but one of them was Yeti. When they got home, they showed their friends and family the list of 10 name ideas for feedback. Some people liked the name Yeti, and others hated it, but everyone remembered it. The brothers thought that was a good sign. They also didn’t want to use their names like other hunting and fishing companies often did because they felt it would tie them too closely to the brand and make it more difficult to eventually sell. 

They liked the name Yeti since it was short, only four letters, and would look good on a hat (important later). They were inspired by another short name, Sage, a popular fishing rod company at the time. A Yeti is the ice monster of the Himalayas. It had meaning. It was cold, tough, and lived in a harsh environment. And it was easy to remember. 

With the name secured, the brothers placed their first purchase order for a container of coolers from Ivan’s manufacturing plant in the Philippines. At the time, the container load of coolers cost $30-35k. Ryan had $100,000 left from selling his fishing rod company that he put into the new business. This initial investment left him owning 49.5% of Yeti which as Ryan puts it ended up being a “pretty damn good investment” and Roy owned the other half.

Roy had a family at the time while Ryan was single, so Roy took over product design and improvement at the home office while Ryan hit the road selling coolers. Roy was on the phone daily with Ivan discussing product improvements. Meanwhile, Ryan loaded up his dad’s van with coolers and drove to trade shows. Later, he would ship the coolers to trade shows and fly in. His booths were simple. He would stack 25 coolers in front of a big Yeti banner, and at the end of the show, he would sell the coolers for cash so that he didn't have to break down a booth. He would just catch his flight home with his Yeti banner. He also left the trade shows with a stack of purchase orders. 

Roy knew if he could convince retailers to write the first purchase order, the product would sell once it was in their stores. The hard part was getting the retailers to try it. Any time they were in a retailer they sold like crazy. There was a void in the market for a better cooler. Also, the independently owned shops couldn't make money on the other cooler brands. They were too cheap. Yeti gave the retailers a way to make real money off the coolers they were already selling. 

In the beginning, they didn’t sell to the big retailers like Cabela's. They sold to independent shops. They realized if you sell to the big guys first, they control you. They can name their terms and brands become dependent and reliant on the larger retailers. Ryan had seen other brands get tied up with larger retailers and become so reliant on them that they couldn't say no to them. Instead, the brothers built their business through independent retailers and word of mouth. This allowed them to operate on their own terms rather than having large retailers dictate them. 

The brothers also sold coolers direct. Someone would call or email and they would sell a cooler directly to them. Word of mouth spread like crazy. They packed each direct order with a free Yeti hat.

Early version of the Yeti website

In year one, Yeti made around $500,000. It was already bigger than any business that the brothers had started previously. The company doubled (or more than doubled) in size each year after that. With growth rates like that, it “gets big, quick” as Ryan puts it.

Tragedy & Scaling

Then, in 2008, right as the company was gaining traction, disaster struck. 

Roy who had been in near daily contact with their manufacturing partner Ivan doesn’t hear from him for a couple days. This had happened before when Ivan went on vacation, but Roy is concerned and eventually gets in contact with Ivan’s wife. He learns that Ivan was tragically murdered. 

Ivan was leaving his factory on his way home from work in his Toyota Prado when two armed gunmen riding motorcycles emptied a .45 caliber pistol into his car. Nobody was ever convicted, but it was assumed to be a murder for hire hit on Ivan.

A power struggle between Ivan’s wife and brother ensued for control of the factory. Prior to his death Ivan had instructed that his wife should continue to run the factory if anything were to happen to him.

On top of the tragedy of losing a business partner to extreme gun violence, the murder also left the Seiders brothers’ business in a terrible position. They were a single product company with a single manufacturer. The company had three containers on the water but no certainty that they would ever get more product again.

They responded quickly with two decisions.

First, they raised prices. The thinking went that this might be the last product they’re ever able to sell, so they should try to get the most they could from it. They prepared for angry emails and calls from retailers. None came. This proved the value of the brand that they had built, and its inherent pricing power.

Second, they opened a US manufacturing plant. US manufacturing was more expensive, but the company needed to diversify its supply chain. Initially, the product from the Philippines was better. They had a low quality injection mold, but labor was so cheap in the Philippines that they could throw a lot of labor at the imperfections to polish them out. With labor more expensive in the US, they couldn’t use that solution. Instead, they invested in expensive Italian injection molds that resulted in a better finished product without the need for a lot of manual finishing. 

Ivan’s wife ended up winning a months-long court battle and taking control of her deceased husband’s manufacturing business. She was able to continue to supply Yeti with coolers. The brothers then shipped copies of the expensive Italian molds to the factory in the Philippines and output increased dramatically. 

The Exit

Yeti continued to grow like crazy. There were typical growing pains of a fast growing consumer products business of trying to act quickly to seize the opportunity and to get enough product to meet the rising demand.

Throughout the scaling process the brothers never raised outside capital. They funded the business with the profits from their product sales and were both self described “low rollers”. By 2011, sales reached $30M per year. The brothers had created an incredibly valuable business, but neither of the brothers had any real wealth outside of the business. They began a sales process. They weren’t sure if they would sell the whole thing or part of it. They both wanted to make sure that whatever the outcome they would never have to work again.

They ended up selling a majority share to a private equity company called Cortec Group in the Summer of 2012. At the time, the company had $40M in revenue and 20 employees. Cortec acquired a two thirds stake in the company for $67M. They were very involved in Yeti’s business. They helped build out the team and would visit the Yeti team monthly for meetings to guide the strategy and operations of the business.

Roy and Ryan each owned 10% of the company after the Cortec investment, and the company continued to grow. From 2012 to 2014, it was still a single product company - hard sided coolers. And the coolers were selling like crazy. Along the way they had opened a second manufacturing facility in the US. 

One day in 2015 Ryan received as a gift a vacuum insulated bottle. After testing it out himself, he threw it on Roy’s desk and said it was incredible. A month later Roy had designed his own 20 oz and 30 oz cups. The brothers felt they had the brand and distribution to succeed with another product.

They presented the idea for cups at the next board meeting. The private equity board viewed it as a distraction. Why distract the business with $30 cups when they could already barely keep up with the demand for $300 coolers the thinking went. At the time, Yeti was a one product company selling $150M worth of hard sided coolers. In the board meeting they went around the table and asked for estimates on how much cup sales could be. Most estimates ranged from $5-10M a year. Small potatoes for a company doing $150M in sales. Then Roy stuck his neck out and estimated they could sell $29M worth of cups.

Based on Roy's conviction, the board agreed to launch cups. It was the birth of the Yeti Rambler, their first non-cooler product. They ended up selling $150M worth of cups in the first year they launched them. Cups doubled the size of the company practically overnight. Rambler cup sales equaled cooler sales in only the first year of launch. After that, the board approved any new product Roy wanted to build.

The brothers' 10% reinvestment in Yeti was starting to get valuable. They both thought the big win was the 2012 majority sale, but now their minority stakes were becoming more valuable than the initial sale. In 2018, the company decided to go public. The brothers flew to New York to ring the bell on the New York stock exchange. Cortec Group eventually sold its stake in Yeti in 2020 and realized a massive 25x return on their investment. As of this writing, Yeti has a public market cap over $3.7B. The brothers are less involved in day to day operations and spend more time on the hunting ranch they bought together in South Texas.     

Playbook

There’s always a market for better 💸

When Yeti started, the typical cooler would retail for $30-50. They were designed and optimized to compete on price. Manufacturing and design corners were cut in order to achieve the lowest possible price. Yeti took the opposite approach. They set out to design the best, most durable cooler possible and then priced the product based on the final cost. This meant their coolers retailed for over $300 - 10x the competition at the time. There is always a market for a better alternative. There are always customers that are willing to pay for the “best” product in any category, and oftentimes people are surprised at how large that market of consumers is. 

Start w/ tight knit community 🐟

When Yeti started, they focused on the community that the Seiders brothers knew well: hunters and fishers. These customers valued durability and were willing to pay for it. Rather than trying to target everyone in America, the company instead had a well defined niche. Yeti knew where this customer shopped - independent fishing and hunting retailers - and they could rely on word of mouth to spread among the tight knit community. This allowed a small company with limited resources to feel ever present and known among a certain subset of customers. Some companies fear starting with a niche group of customers because they are limiting their TAM, but the Yeti story proves you can start with one group of end users and expand well beyond them as your company scales. Yeti started with coolers for hunters and became the go to beverage cup for soccer moms. It’s much easier to expand from a niche community than to try to address a broad market from day 1.

You will be copied 👯

It is inevitable that if you find any modicum of success in consumer goods that you will be copied. It’s not an if, but when. RTIC launched a similar roto-molded, hard-sided cooler at a cheaper price point. There are some legal routes companies can take when their products are copied (and Yeti did), but the strongest defense against copycats is building a strong brand. If your only differentiator is the product, then eventually competitors will launch a similar product at a cheaper price. When you combine a unique product with a strong brand, then you have the makings of a defensible consumer products moat. 

Product expansion ↔️

Yeti could have been content being the largest cooler company in the world. At the time they launched cups, it wasn’t clear that they should. It was viewed as a distraction and potentially harmful to their core cooler business. Today, the company makes the majority of their revenue and profits from drinkware. Thoughtful product expansion is key for consumer product companies. Firms can leverage the brand and distribution they have built to effectively expand into new categories. However, the Yeti timeline is instructive. They launched their cooler business in 2006 and didn’t launch cups until 2015 - 9 years later. Many companies are too quick to expand into new product categories. They add new products before they’ve gained traction in a single product category. This creates the true distraction that the Yeti team initially feared. The takeaway for us is that product expansion is great but don't be afraid of patient product expansion.

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