It’s summertime, which means it’s time for our annual grilling episode. In past years, we’ve talked to the leaders of Big Green Egg, Traeger, and Blackstone, and it’s always fascinating how those companies have the same kinds of problems and ideas as any of the tech companies we have on the show.
In fact, it’s funny — in what can only be described as a perfectly Decoder situation, I really wanted to have Blackstone CEO Roger Dahle back on the show this year because his griddle company is such a success that he’s in the process of buying Weber, the biggest name in the space. But he’s stuck in antitrust review so he couldn’t come on the show. Grilling episodes, man — they’re the best.
Anyhow, all that means is that I finally had the opportunity to talk to SharkNinja CEO Mark Barrocas. We’ve wanted to have SharkNinja on the show for years now, mostly because it has the best name of any company that we’ve ever had on Decoder. The name perfectly describes the company’s structure: there’s Shark, and there’s Ninja. And, just in time for our grilling episode, the Ninja division of Mark’s business launched its first grill, the FlexFlame, earlier this year.
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But as you’ll hear Mark and I really get into, SharkNinja is really a product design company more than anything. It has what you could only describe as a kind of relentless approach to product development — SharkNinja launches 25 brand new products a year across dozens of categories in countries around the world. So while we do spend a lot of time talking about the decision to launch the FlexFlame grill and what the business of grilling looks like for SharkNinja, you’ll hear Mark and I talk a lot about the company’s broader philosophy around product development across all of its different categories.
That’s because a lot of that philosophy, which was developed back in the late 2000s for markets like vacuum cleaners and blenders, is now being applied to everything from slushy machines and pizza ovens to LED face masks. You’ll hear Mark explain that they have a product engineering and design team of more than 1,300 people around the world dedicated to figuring out new twists on household staples. It’s also remarkable how many of the products are built around fan technology, which comes up a few times in this conversation.
In fact, a key component of the new FlexFlame grill is a fan that lets it do a lot of different things. But the grill industry, as you might know, is a fiercely competitive market with a lot of brand loyalty, and product features alone might not be enough. I can’t tell you how many furious reader comments and emails we received when the CEO of Big Green Egg took a shot at Weber on last year’s grill episode. People love their grills, and they will fiercely defend them.
So I really wanted to ask Mark how his style of product development worked in the context of gas grills — and whether he’s envisioning Ninja’s outdoor grilling products as premium devices you keep for a long time, or as ones that might rust and get replaced after a few years as you would an iPhone.
Mark and I also spent a good deal of time at the end talking about marketing. SharkNinja spends more than $700 million a year on advertising, a great deal of which now goes to product placement and content creators on Instagram and TikTok. You’ll hear Mark recount his history of selling products on television infomercials back in the 2000s, and how that’s now evolved into having his appliances become viral sensations online.
Mark has a lot of thoughts about the state of the creator economy, which is already in the process of getting totally upended by cheap and limitless AI video, and whether he sees it teetering on the edge of a crash that could transform how he markets and sells his most popular products.
This episode is a real ride — Mark’s background from infomercials really comes through at times, and I think you can tell that I found myself just trying to hang on throughout this one.
Okay: SharkNinja CEO Mark Barrocas. Here we go.
This interview has been lightly edited for length and clarity.
Mark Barrocas, you’re the CEO of SharkNinja. Welcome to Decoder.
Thanks so much for having me.
I am really excited to talk to you. I’m fascinated by SharkNinja as a company. It’s been around for a long time, but you’re having a bit of a renaissance lately. On top of that, this is our annual summer grill episode, and you guys just launched a new line of grills. So it’s perfect timing. Couldn’t be happier about it.
Great, really happy to be here.
Let’s talk about SharkNinja as a company to set the stage a bit. I think a lot of people know Shark, and a lot of people know Ninja. You’ve started marketing the main company a little bit more recently. Tell me about this company. Why have the two brands? How is it structured? How do you think about SharkNinja as a company?
As you said, the business behind these two great brands is SharkNinja. People know the Shark brand. We built Shark into an over $3 billion [a year] global business. We have the Ninja brand, which is over a $3 billion [a year] global business. Now, we’re actively marketing the SharkNinja business behind these two great brands, and trying to explain to consumers that we’re problem solvers. That’s what our business is all about. We find problems that others don’t see, and we solve problems that others can’t.
We can get more into how we do that and why that’s unique to SharkNinja. We’re in 37 product categories. We sell in 27 countries around the world to everyone, from a high school kid doing a TikTok or an Instagram video about our products all the way up to a 60-year-old guy who’s focused on outdoor grilling or smoking. So, we’ve got a big demographic base and big socioeconomic group of consumers.
The idea that you’re going to market the central company, SharkNinja, as problem solvers comes up. There are lots of big household brands that exist in that space. OXO is very famous for this In the kitchen, where everything is somewhat uniquely designed, a little bit different. It’s not a direct competitor to you, but the marketing there feels familiar. This is going to be the highest bit of design product that you can get. There are lots of others that play the same game. Is that what you’re thinking about? Do you want people to think of you as a design company or is it something else?
No. We want people to think of us as a consumer problem-solving company. You can focus on consumer products and look at it through a technology lens. You can say, “Hey, I have this core technology, and I’m going to take it and apply it to two or three or four different categories of products that might be applicable.”
Our core technology is consumer problem-solving. We’ve got a big team of ethnographic, consumer insights researchers. We’re mining consumer data, online reviews, social media content, and comments. We’re in hundreds of consumer homes around the world every year. We’re in restaurants. We’re in commercial environments looking at how people clean or cook there.
We’re trying to find either a problem that a consumer has that they may not even know that they have — and we can talk about examples of that — or we’re trying to find things that the consumer is doing outside of the home that they’re not doing inside of the home. Ultimately, I think those two different things become the germs of innovation and ideas that we then have our 1,300 engineers around the globe focus on. And you say, “Well, hold on, vacuum cleaners have been around for 100 years. Hasn’t every problem been solved?”
I’ll give you a great anecdote. We went into 100 consumer homes, and we watched consumers vacuum. During the cleaning session, about eight or 10 of those turned over the vacuum, took a knife or a scissor, sliced the hair off the brush roll, pulled the hair off, threw it in the garbage, and finished their cleaning session. At the end of the cleaning session, we said to them, “Is there anything you do to change your vacuum cleaner?” They said, “No, it works great.” We said, “Well, hold on a minute. How about that time when you turned it over and you nearly cut your hand and you sliced it?” They started apologizing for the product. They started saying, “Well, I have two daughters with long hair. I have three dogs.”
A consumer works around the problems of the product. Well, for us, that becomes an idea. So, we go back to our engineers, and we say, “Can we develop a vacuum brush roll that doesn’t wrap hair?” Eighteen months later, we came out with Shark’s Self-cleaning Brushroll, and it became the number one selling vacuum cleaner in the United States.
That’s just a little example. We do that in category after category after category, which is why we’re not limited to two or three or four categories. We’re in 37 different product categories in and outside the home.
There’s a lot there that I want to unpack. You’re talking about a lot of upfront investment in product development. Many of your competitors don’t do that. They really do take core technology and reapply it in different categories. Many of your competitors are based in China. They’re selling on Amazon, and they’re selling clones of your products. They don’t have to front that investment, and they can keep their costs low. How do you think about that dynamic? What you’re describing requires you to constantly front the cost of innovation that will almost certainly get copied at higher rates across the board.
SharkNinja has two main competitive advantages. One is disruptive consumer innovation. We spend 7 percent of our sales on R&D and innovation in an industry where competitors spend 1 percent of sales or less on innovation. We bring 25 new, ground-up products to market a year. I’m not talking about a new product as a new color or button. These are ground-up, brand new products across so many different product categories.
We enter into at least two new product categories that we’ve never been in before every year. Before last year, we were never in the skincare business. We were never in the outdoor cooler business. Last year, we went into four new product categories. We made an LED, infrared, cryo face mask, which was our first FDA-approved medical device. We launched a slushy machine that went viral on social media. We made our first outdoor pizza oven. You can’t think of more diverse categories. The common stream through all of those is that they all solve a consumer problem.
I think this is a great time for the Decoder questions. Usually, we talk about some controversy at the top, but you’re describing something that’s so interesting that I think the structure will actually help explain a lot. How is SharkNinja structured? How many people do you have, and how is it organized?
We’ve got nearly 4,000 people around the globe. From a structure standpoint, we have an executive management team that is half homegrown, with people who have been with me for 17 years. That’s rounded out with other folks who have joined the organization and have been able to bring scale or global experience into their areas, like product development, engineering, sales, and marketing.
Those folks have been with me a long time. We’ve really helped build the SharkNinja secret sauce together. We’ve rounded that out with great talent from other great companies and with other great experiences to build a really strong management team.
How is that organized? Do you have a Shark division and a Ninja division? Is it all one company? How’s that expressed?
From a functional standpoint, the administrative roles are all corporate SharkNinja. There’s a corporate CEO, a corporate general counsel, a corporate COO, and a corporate people and culture leader. When you start to get into the individual teams, we break it up. There’s Shark Home, which involves cleaning, home environment products, fans, and air purifiers. We have Shark Beauty business, which is haircare and skincare. Then we have the Ninja business, which is everything that we do within Ninja. So, that’s how we break down the business. There are two brands, but inside of those two brands is Shark Home, Shark Beauty, and Ninja.
If I look at that broadly and I just look at your competitive set, Shark and Dyson have always been back and forth. There’s been some lawsuits, some patent disputes. Some of those have settled over time. There’s a lot there.
To your point, Dyson invented fan technology and it tried to express it across a number of different products that led them into beauty. It got into hairdryers, then expanded into the rest of the beauty products, and it’s done well. How are you thinking about Shark? You started with your core technology, you ended up at beauty, and now you’re going to do the rest of it?
If I go back 17 years, we were a small business. We were a $150 million [a year] business. I’d love to say that there was a grand plan of how to become a $6 billion global business without acquiring a dollar of revenue.
Could you tell me? That would be great.
To be honest with you, we just wanted to make great products that consumers loved. If I go back to 2008, what we realized was that the consumer was getting more and more power in terms of being educated before they made a purchase.
In 2008, there was a thing called Consumer Reports. You opened up Consumer Reports and it told you the eight vacuum cleaners to buy. If your vacuum cleaner wasn’t listed in there, you were going to have a really hard time gaining awareness. What my partner and I at the time realized was that consumer online reviews would be the great equalizer. You hear that today and say, “Well, what great equalizer is that?” Well, back then, people often bought from one brand or based on an expert recommendation. What started to happen was consumers started going online and started writing honest reviews about their experiences with products.
Soon, consumers weren’t going to open up Consumer Reports before they would go out and make a purchase. They were going to go online and look at 10 million of their closest friends to figure out which vacuum cleaner or blender to buy. And they were going to get honest opinions. That is one of the major drivers of our business. If I go back 15 years, we built our business one five-star review at a time. So, if you had a great experience with a Shark vacuum, you say, “Hey, I might try Shark’s air purifiers that just came out,” or, “They got into haircare? I might try their haircare products.”
It’s interesting. What we look at is what gives us the right to be in the category. The right to be in the category is not because you have a brand that you can just put your name on because you see a sales opportunity. What are we bringing to the consumer that they can’t get anywhere else? What’s an unmet need that the consumer has? We set a very high bar on that within the company. There have been categories that we worked on for 10 years and never brought a product to market because, ultimately, we came to the conclusion that the consumer and world don’t need us. So, being anchored on this beacon and asking what gives us the right to be in the category has led us very methodically to the next opportunity and the next opportunity and the next opportunity.
What’s one that you’ve been rejecting for 10 years?
I loved the power tools business. I think the Shark brand can translate into power tools. We used to think of ourselves as in the home. We’re making a lot of products now for outside the home. I thought power tools were a great opportunity. We’ve tried it three, four… Ultimately, we got to the place and said, “You know what? We’re not bringing anything that’s game-changing or solving a massive problem that somebody else isn’t solving.” And we decided to go back to the drawing board.
I will tell you also that there are categories that we tried for eight years, and we eventually cracked the code. An example of that is the carpet extraction and stain cleaner category. We became the number one selling vacuum brand in the United States in 2014. Ever since, retailers and consumers would say, “Why aren’t you getting into the carpet cleaning business? That seems so logical from a brand extension standpoint.” The honest answer was that we never came up with something that was great.
We finally cracked the code on that about two and a half years ago with a product called the Shark CarpetXpert. It cleans carpets better than anything else on the market. It’s much more lightweight, much easier to use. It does it with an attachment called the Stainstriker. In a short period of time, we gained over 20 percent market share in that category.
This shows us that just because we might bang our head against the wall a couple of times doesn’t mean we won’t eventually crack the code. We may figure it out. When we do figure it out, the innovation really connects with the other competitive mode of the business, which is creating viral demand for our products. We spend 11 percent of sales on advertising in an industry that spends very little on advertising. So, you’ve got a disruptive product that solves a consumer problem, and you’re able to go out and talk about it on things like social media, experiential events, and TV. When those things come together and you get it right, it really connects with the consumer. Not just in the United States but globally.
That’s a really fascinating piece of the SharkNinja story, and I think it tells a bigger story about the advertising market, particularly on the internet, than anyone really is giving credit to you. But I want to stay in corporate structure for one more second. So you’ve got Shark Home, Shark Beauty, and Ninja. Ninja feels like kitchen products?
Kitchen and outdoor. We do outdoor cooking, we do outdoor coolers. Yeah, kitchen and outdoors.
At the company, you’ve got 1,300 engineers. Are they split between divisions? Do you have central engineering? Do they compete for resources? How does that work?
We have 1,300 engineers today around the globe. They’re based in Boston, London, and Asia. There are certain functions within the company, like electrical engineering, that might go across different categories because they’re subject matter experts. But it’s not just the number of engineers that we have. It’s the competency of those engineers. We’ve got mechanical engineers, electrical engineers, mechatronics, app IoT, and software engineers.
I think you’d be really surprised if you went inside one of our products. There’s an enormous amount of technology in a product that retails for $199. If I went back seven or eight years, most of it would be mechanical engineering. Today, the software team and the electronics team, together with mechanical engineering, have allowed us to bring so much more functionality to the product, allowing the consumer to have so much versatility with it than they ever were able to before.
So, when the Ninja team says they’ve got an idea for a gas grill and they need a bunch of software engineers to work on the app to run the FlexFlame system, and those same engineers are being pulled towards the next project, how do you divvy up those resources?
It’s a challenge, But here’s what’s super exciting about it. If you’re an engineer and you work at a company that has one product category that you sell, eventually after three or five years, you get to the point where you say, “Look, I’ve gotten tired. If I want to go to another opportunity or I want to work on something else, I have to find a job in another company.” At SharkNinja, you can find your next job within SharkNinja. You’ve been working on vacuum cleaners for three years. You want to try something different? How about air fryers? How about outdoor cooking? How about fans? How about robots? How about hairdryers or skincare?
I think the cross pollination of engineers is so powerful for us. Our ability to to put out an intercompany message that says, “Does anyone have experience in LED lights? Does anyone have experience in airflow technology?” To be able to see the number of experts we have internally is incredible. If you’re a company, you might have to go outside and find a whole lot of subject matter experts. We have a whole lot of subject matter experts inside that are red teaming each other’s products.
The joke I’m always making on Decoder is that if you tell me your company’s structure, I can tell you 80 percent of its problems. You’re describing two big divisions, both of which are growing and aggressively launching new products. There are some subdivisions on the inside.I’m guessing if the Ninja team steals a bunch of LED lighting engineers from the Shark team, they’re not going to be happy about that. That’s you. You’ve got to mediate that dynamic. How do you mediate those resources? How do you allocate them?
I think a lot of it comes down to the needs of the product. We really don’t look at it rigidly by if it’s a Shark product or Ninja product. We start with a product pipeline of ideas, which might have 65 ideas that we start with. Over time, we whittle that down. We might put something into a prototype, get it into a consumer’s home. We thought it was a great idea, but the consumer says they’re not interested so we throw it away.
We might just put something on packaging. We might not even put it into a prototype. We might show them a box front and say, “Hey, does this get you excited?” We might look at something and say, “It’s great, but it’s too expensive and we don’t think it’s commercially viable.” Maybe it’s too early for the consumer. Maybe there’s a problem, but the consumer doesn’t even know yet that it’s a problem.
I’ll give you an example. They just mandated composting in New York City. It’s very interesting. A New York apartment is going to have to sit there with their food scraps, putting them into this little plastic bin and this little bag. They’re going to have to wait seven days. What do you think happens to that bag on day four or five? It doesn’t smell great. So, we had some young engineers that were super passionate about solving that problem. The challenge with it though is that it’s not in enough municipalities. The consumer hasn’t engaged with it enough to realize what the problems are. So it may be something incredible but it’s two years too early.
So, we’ll put that in the parking lot, and we’ll say, “Let’s revisit that when it comes to the next product innovation cycle.” We really do look at it at the product level and not at the brand or company level. I think that’s what helps us assess how to divvy up resources.
The other thing I would say is that we use a tremendous amount of outside experts. This is a company where it does not have to be invented here. We are looking for the best and brightest people to help us solve consumer problems. In any given month, we could be working with as many as 50 outside subject-matter experts. They could be on things as little as gear systems or troubleshooting a particular heater that we might have.
That’s something that I don’t want to underestimate because at a lot of engineering companies, engineers feel like, “Hold on, you hired me to solve it, so I have to solve it.” We’re sitting here saying, “At the end of the day, we want the consumer to open up the box and enjoy the product.” The consumer doesn’t care whether you made 100 percent of the product internally or whether you brought in five subject matter experts to help. We do a really incredible job of getting the best and brightest people to help us solve these problems.
That really comes down to how you think about investing in the core technologies. I’ll just stick with Shark and the vacuum cleaners, blow dryers, and air purifiers. At the core of that technology are high-efficiency small motors. They can move a lot of air. You can express that in multiple kinds of products. That’s a very competitive segment. That’s the patent lawsuits. It’s deeply competitive.
You can go buy that core technology. Once you’ve developed it, the goal is to ramp it over time and take margin out of all that upfront cost. But you’re launching into so many new categories. You’re going out to buy lots and lots of new core technologies from 50 different subject matter experts. How do you think about managing those life cycles? Where do you think about spending the money on new technologies that will last for a long time and let you take margin out and where do you think the technology is mature, and what you need to do is actually expand the category?
It’s interesting. I’ll go back to the example that you gave on vacuum cleaners because I think that’s a good one. We have patented a no-loss suction vacuum technology, so the consumer can pick up whatever they want and won’t lose any appreciable level of suction over the life of the product. But as you start identifying the next consumer problem, you start having to then build evolutionary or add-on technologies.
I want to give you some examples that I think you might find interesting. We had great no-loss suction technology when we developed our first vacuum cleaner, which was called the Shark Navigator, We cleaned carpets better than our competition, and we did it at a fraction of the price. Those were the core things. In 2009, we found that the American consumer was really interested in cleaning carpets. That was the proxy of a great vacuum cleaner.
In 2010, we said, “Okay, what’s the next problem for us to solve?” We went into consumers’ homes, we watched them vacuum. In the homes that had stairs or multi-level homes, they would plug the vacuum in, pull the hose out, and clean the first three steps of the stairs. They would then unplug the vacuum, walk upstairs, plug it in, and clean the top three steps. The middle three steps would never get clean because the hose was never able to reach that far. So, we looked at that and we said, “Why is the vacuum tethered to this base on the ground? What if you could lift it away, walk around with the vacuum cleaner, and have 30 feet of travel with the cord?” That product was called the Shark Navigator Lift-Away. It’s still the number-one selling vacuum cleaner in the United States. We solved the problem by having vacuums that not only cleaned on the floor but cleaned above the floor as well.
Now you might say, “Okay, hasn’t everything been developed?” Well, three years later, we want to know what’s the next problem. The next problem is cleaning under furniture. You don’t want to move the furniture. How do you clean under a bed? Imagine what under a bed looks like when you haven’t cleaned it for two years. So we developed something called Powered Lift-Away. You took the canister off the vacuum, and we had power that went down through the hose and to the nozzle. You could now take your nozzle, just like a canister vacuum, and go anywhere, under furniture or under beds. That became the number-one selling vacuum cleaner in the United States when it came out.
So you say again, “Well, has everything been invented?” A few years later, we said, “Wow, we do a great job at cleaning carpets, but we aren’t doing as great a job cleaning hard floors.” With carpets, you need a really aggressive brushroll to clean. On floors, you need to be able to pick up the fine dust. So we looked at that and realized they were in conflict with one another. What if we developed a vacuum cleaner that had two brushrolls: an aggressive brushroll that cleaned your carpets and a fluffier brushroll that could pick up the fine dust on your hard floors? That technology was called Shark DuoClean. Today, that’s still our best-selling vacuum cleaner.
So, finding the next problem and the next problem will lead you into new technology and new evolution. By the way, all of these things that I just mentioned to you are patents. They’re all things that only SharkNinja does at this point. But we’re constantly on this quest to find the next problem, and then that leads us into our innovation pipeline.
I’m going to push back on you just a little bit. I know the Decoder listeners quite well. I know what they’re saying to you in their cars as they listen. The vacuum cleaner market is pretty mature. It is ferociously competitive. There are products from LG, Samsung, Dyson, you name it that do all of these things and more in different ways. I hear what you’re saying. You see the problems and you innovate for the customers that you see and the problems they have.
But the market is competitive. How often do you spend thinking about where the market is going, where the competitors are getting ahead of you, and how to leapfrog them?
Nearly every day. This is what we do. We’re consumer problem solvers. We’re trying every day. Look, we had zero market share in the vacuum industry in 2008. Today, SharkNinja has over 40 percent market share in the upright vacuum cleaner market in the United States, which is the largest portion of the vacuum cleaner market in the US. We became number one in 2014, and we’ve never given that up. Why? Because we’re continuing to innovate and innovate.
We’re driving up the average sell price. You could buy a Shark vacuum for $129, or you could buy a Shark vacuum for $499. We are bringing the opening-price consumer up into our brand. We don’t have something for the $79 consumer, but I think the consumer looks at performance, value, quality, and innovation.
You’ve got to bring all four of those things together for the consumer. I think you might have innovation, but the consumer needs all of this and value is a huge component of it. The opening-price consumer can step up to a $129 Shark vacuum. The high-priced Sephora, Ulta consumer can buy a $499 vacuum. There is no brand that cuts across such a broad price range and such a broad feature range.
The other thing that I think we do a really effective job of is being the vacuum for you when you move into your college dorm room. We want to be the first vacuum for you when you get your first apartment, when you get your first house, when you have your family, when you get your first pets, and when you wind up as an empty nester. I don’t think there is a brand out there selling corded vacuums, cordless vacuums, robot vacuums, hand vacuums, or shop vacuums that is doing such an effective and compelling job of innovating and innovating while also having extraordinary value and great quality.
One of the things I think about a lot here is how companies grow. You’re describing people buying lots of vacuums over time. A long time ago, I had the former CEO of Sonos Patrick Spence on the show, and I said, “Is your whole plan that people will just get bigger and bigger houses and you’ll sell one more speaker every time?” Is that the plan in the vacuum business? People are just going to buy new vacuums at a steady clip?
I think the more macro question is how do we grow and how do we think about growth? We think about growth with this three-pillar growth strategy. One is gaining share in our existing categories. We enter categories, and within three to four years, Shark or Ninja becomes the number one or number two market leader in that category. There’s still lots of white space within our existing categories. We’re in an industry with an available [total addressable market] of $120 billion. Last year, we were a $5.5 billion business. So, we’re less than 5 percent of the overall market.
Number two is expansion into new product categories. Many companies say they can expand into new categories, but either the retailer or the consumer doesn’t let them. They don’t see them in those categories. I think we’ve been really effective at taking the Shark and Ninja brands into many different places.
Then, third is international expansion. This year, over 40 percent of our business is going to come from outside the US. So, when you think about us compared to brands that are able to scale globally, we launch 25 new products a year and we sell20 out of those 25 products n every market. The same product. We look at the consumer from a product innovation standpoint across this matrix. How does the American consumer think about a product? How does a European consumer think about the product? How does an Asian consumer think about the product? I think that’s an important point to note. We’re not just innovating for one type of consumer, we’re innovating for a global consumer.
I’m going to ask you the other Decoder question, and then I want to talk about expansion, particularly into grilling. This is our grilling episode. We spent too much time on vacuums.
Here’s the other Decoder question. How do you make decisions? You’ve laid out a lot of frameworks here. It’s clear you’ve thought about this a lot. What’s your framework for making decisions?
We have something, and you can go to our website and see it. We’re very focused on culture. Culture is our competitive advantage, it really is. We have 5,000 patents. We have great brand names. We have incredible innovation. What has enabled us to grow at a compounded annual rate of 21 percent a year for the last 17 years is the way we think. I’d invite you to go onto our website and look at a document called “Outrageously Extraordinary.” The idea is that we have this inextricable desire to be the absolute best we can be. That comes with this inherent fear of failure. How do we get rid of the fear of failure because you tend to play it safe when you’re worried about failing. So, for us, we set what we call these “unimaginably high bars” in a game worth playing.
You will seldom see a meeting at SharkNinja where you say, “let’s go after this,” and everyone in the room walks out and says, “I think we can do that.” Most people are going to walk out of the room saying, “How the hell are we going to do that?” We’ve just set a bar that seems absolutely impossible. So, we think that courageous leaders set an unimaginably high bar in a game worth playing. Even if you fall short of that, you will still do something extraordinary. If I set out to have number one market share going from zero, and that’s our goal and we wind up being number two. But hey, we started from zero. So we’ve got to set a very high bar to start.
The second is this idea of leading with a relentless desire to know more. Answers in business are not surface level. People want an easy answer to a tough question. The answers lie deep, deep in the business with trying to understand the root cause of the problem. What is the mousetrap that you’ll create that will besustainable, that can’t be disintermediated by a Chinese factory that’ll come in and sell a low-cost product on a platform? So how do we have this desire to know more, or know more than anyone else that is competing against us? We want to be explorers, not tour guides.
Most of what we’re doing, is in uncharted territories. My expertise ran out eight years ago. I’m running on fumes when it comes to expertise at this point. Every day, we’re exploring new territory. We’re pivoting quickly. We’re getting smarter every day. We use the phrase “we reserve the right to get smarter” at the company. We make a decision, new information comes in, and we decide tomorrow that we’re going to change the decision. I think one of the things that many companies, or many leaders, get stuck in is saying, “I made a decision, so I just have to go in that direction.”
We want to constantly be on the lookout for if the decision we made was stupid. I stood up in front of our town hall at a corporate meeting a number of months ago, and there were some questions about changes that we had made last year. I said to the organization, “I made a change because previously I was being stupid and I’ve decided now to be un-stupid.”
What was the change?
The concept of un-stupid went viral around the company. People felt empowered to say, “I want to be un-stupid today. We’re going down this path. It doesn’t seem like we’re going to be successful. Let’s pivot and change.” SharkNinja’s not curing cancer. We’re trying to delight consumers. We’re trying to positively impact people’s lives.
So, the change that you mentioned is how we were investing dollars in the company. We have to stay focused and invest dollars in areas of growth: growth when it comes to product development, growth when it comes to geographic expansion, growth when it comes to marketing and building awareness for our brands. I think we got too scattered and went after too many shiny objects.
There are lots of great initiatives for a company to go work on, but you also need focus. You need to make sure there are certain things that are sacred in a company, and that’s what requires the investment. Everything else might have to wait in line. You just can’t do everything at once. So, we had to pull back on some of those things, and we had to make some tough decisions about where we were going to invest and where we were going to hold for a little while, and then relook at it going into the next year.
This is a perfect tee up for your decision to invest in grills, but I have to know, what did you pull back from? Was there anything specific?
I think we went after a lot of technology projects. We were implementing Oracle at our company. We were re-platforming our e-commerce site. We’ve got this great partnership with Salesforce, and we’re launching a new e-commerce site in September. There were certain things that were just really mission-critical. There were other things that were really just nice-to-haves. They were not going to make or break our business, they were not going to create a competitive advantage. So, we had to decide what are the most important things and what it isn’t the right time for.
All right. Let’s put all this into practice and talk about grills. I love talking about grills. Can you tell? I’m eager to do it.
Great.
This is one of my favorite episodes of the year, to talk about the grill industry. You’ve laid out a lot of frameworks here. You’ve said, “We should have to deserve to be in the market. We need something better.” You’ve laid out not wanting to get away from the core areas of growth. The grill market is ferociously competitive and extremely well-served with lots of innovative companies.
It feels to me like the people who are really into grilling like having different kinds of things as opposed to just one thing. I see it in backyards all over my town. If you got one, you’ll soon have two. It’s also been disrupted. One of our very first grill company guests was Roger Dahle, who founded the grill company Blackstone. He’s in the middle of buying Weber. He actually couldn’t be on this year because of antitrust. He has to go through FTC review to buy Weber. That’s a big disruption. He bought the market leader. Why enter this market? Where’s the differentiation? How do you think you can get to number one?
I think you have to go back to the fact that Ninja is the kitchen market leader. We built up a lot of brand equity in air fryers, ovens, cookware, blenders, coffee makers, and all kinds of things in the kitchen. So, three years ago, we decided that it was time for us to go outdoors, and we did it by developing a product called the Ninja Woodfire Grill, which is a grill, a smoker, and an air fryer. It was all electric and it sat on your tabletop. We felt like there was a really unserved need. I’ll give you examples. People who live in apartments can’t have propane, but they can have electric outside — campers, RVs, boats, and things like that, along with tailgates, and you can just plug it in.
We found that people who owned a grill weren’t going to invest in another smoker. So, we found that people would be interested in buying something that was small and could fit on a tabletop next to their outdoor grill, or vice versa. If they owned a smoker, now they could own a grill. We saw this in the vacuum cleaner business. You have an upright vacuum, a cordless vacuum, a robot vacuum, a hand vacuum. So, we went into the market, and in a very short period of time, we took big market share. We’re the number-one selling electric outdoor grill right now. We sell a number of different versions of it. We then went into outdoor ovens. So, we’ve got a really great–
Wait, can I just ask something? Sorry, you’re just in my wheelhouse. Having the number-one selling electric outdoor grill feels like a small part of a huge category.
It is. But you have to understand that you have to enter in a place where the consumer accepts you, and then you have to figure out what’s next. So, we go into tabletop grills and then expand from that into tabletop ovens. Now, we’ve got this outdoor oven that allows you to cook up to 700 degrees Fahrenheit, roast, and make pizza in it. That becomes a nice business for us globally.
Then, we decide where to go next. We’re doing great in tabletop, but now, as you said, there’s this big $5 billion market around large format, outdoor cooking products. So, we look at it, put ourselves in the shoes of the consumer, and ask, “What’s the empathy of the consumer?” The consumer goes to the Home Depot parking lot on Memorial Day weekend and tell one of the orange aprons that they want to buy a grill. The person says to them, “Well, do you want a grill, or do you want a smoker? Do you want a pizza oven, or do you want a roaster or a griddle?”
That becomes the first problem for the consumer. “I’ve got to make a choice.” Maybe there’s multiple grills outside in your neighborhood, but this person is saying you have one to choose from. “What do I do? Do I want a griddle? Do I want a grill? Do I want a pizza oven? Do I want a smoker?” So, we started with that and thought it felt like a really credible problem for somebody to solve. It took us two years, but we developed the world’s first grill that’s powered by propane, electric, and a cyclonic fan. That’s three things. There are incredible patents and technology in this product.
Now, if you have those three things, what can you do? You can have incredible temperature control. Once I have incredible temperature control and I can move and circulate the air inside, I can grill, smoke, have a fully functional pizza oven, griddle, and roast. We called it the Ninja FlexFlame, and it’s the world’s first product that can do all of those things under one hood.
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