Jeremy Andrus Transcript

Clint Betts

Jeremy, thank you so much for coming on. You are someone who has done things that not too many entrepreneurs or leaders have done. You've been a part of taking two companies public, both consumer brands, and both really with cult followings. These consumer brands you had. The first one—you took public is Skullcandy. What lessons did you learn from taking that public that you've applied to Traeger now?

Jeremy Andrus

Well, lesson number one, don't run a public company. And I say that tongue and cheek, but when we went on the roadshow for Traeger, I had written an article in Harvard Business Review a few years ago, and it was a long article talking about my experience of Traeger. And I made a comment that I would never run a public company again.

And we got on the roadshow and it was virtual. So we had 50, 60 meetings and every single meeting, I figured out in the first meeting that this is going to come up every time. Someone said, "Hey, I read an article," and by the 10th one I'm like, "I know that didn't age well, did it?" Where I said, "I will never run a public company again."

What I will say is that the lessons were boundless. And when I took Skullcandy public, I was just figuring out how to be a CEO of a fast growing business. And when you layer on running a public company, it's just an entirely new set of challenges. And they're actually different challenges. Being a good CEO is a very different job than being a CEO of a public company. How you manage the Street, your earnings, your guidance, your storytelling, they're very different.

And so I learned a lot about these things and I did it in a tough public company. We were small at Skullcandy, we were the highest shorted stock on the Nasdaq for six months. And you talk about a kid in his late 30s trying to figure these things out. And then you realize that more people are betting against you to fail than any other stock on the Nasdaq.

And being number one is great for certain things, that was not one of them. And I say that because there are all sorts of lessons that you learn in terms of leadership. When your stock is down, how do you lead people through it? Transparency, business strategy, how do you focus on long term outcomes and not quarters? And there's a whole long list of these things that really created a blueprint for me here at Traeger. But I would say more than all of the lessons is this belief that I've come to really espouse, is that adversity is important. And going through really hard things with the right attitude, with the right perspective, and coming out the other side and feeling stronger and more confident. You can do more than you could have done before. It's the best thing in the world.

And I didn't realize that at Skullcandy. Skullcandy was, I mean I loved it so much. It wasn't my first startup, but it was my first successful startup. And it was very near and dear to me and my family and I love my team, and I felt like I was failing as a public company CEO. And it ripped me. It really tore me apart from the inside. And I never showed it. I was a fake it till you make it guy then. And I'll tell you all the things I don't know now. But it consumed me, and I went home every night feeling defeated and deflated. And it consumed my life. I stopped working out. It was hard from a mental health perspective. As much as Kristin says I'm great at compartmentalizing, I wasn't happy. And I'm sure I wasn't the best father or husband.

And so I say this because there was a moment in time as I look back on that experience, and I began to write about the experience, not what we did well. We did some things well, and I've brought those things with us to Traeger, but there were things that we didn't do well. And it was clear that my greatest opportunity in business was to learn from that experience, to grow as a leader, and to figure out how do I do it differently the next time?

Clint Betts

Yeah. And how are you doing that?

Jeremy Andrus

It was incredible.

Clint Betts

That's interesting. Skullcandy, incredible success. Almost no companies go public. So that by itself, even though it was the most shorted stock on the Nasdaq, which is actually really cool, now looking back. I'm sure it wasn't cool at the time.

Jeremy Andrus

It's either a good time or a good story.

Clint Betts

And then you get Traeger, and you build an incredible brand, an incredible product. And you've also built an incredible community around there. And I'd love to talk to you about that, because I'm not sure that Skullcandy had the vibrant dedicated community that Traeger has, which is really interesting. How did you do that? How did you build that community?

Jeremy Andrus

Do you know, there are a lot of lessons coming out of Skullcandy. And what I realized, one, was that community is built around an experience, not just around a brand. And so a brand can create all of this energy. And for us, brand was about self-expression in Skullcandy. It's like the real estate that headphones occupy, it's so important. And it's what I choose to wear. The sunglasses, the car I drive, it's important real estate. So it was all about self-expression. And of course, music was what was the foundation of that expression.

But what I learned is that community is actually, it's the next level or the higher order of a brand. When people actually feel connected to one another because of the experience that you create, that is so much stickier and long lasting than a good brand. And because good brands come and go and they encounter challenges over time, new competition, trends change. But my belief is that experiences are the root of what really bonds human beings together.

And so it was part of my vision when I got into Traeger and I said, what is the most foundational communal bond amongst human beings? It's sitting across the table and it's sharing food, and it's getting to know people. And so everything that we do, and this is the gem of Traeger, and we're still a small business relative to those who cook, those who are at home, those who eat. This bond of not only sitting across the table in this all inclusive moment sharing food, but the bond is heightened when you've cooked the food.

And when this journey of bringing something that you created for someone is there, it's like, if you think about as a parent, when your child gives you a gift, it's one thing if they've purchased the gift and wrapped it, and of course that's always meaningful, but when they made it and they talk about it, everything that went into it, that's special. And it sticks. And when that bond happens two or three or four nights a week in your home.

Actually, during the pandemic, when our culinary team wasn't coming in every day, I used to do my lunch meetings in my house, and I would invite people over four or five days a week and I would cook for them. And they couldn't believe that they would show up and it would be a reverse seared steak and a baked potato from the Traeger, and it would be arugula salad with a smoked lemon vinaigrette dressing from the Traeger. And cookies that I baked on the Traeger. And these were different lunch meetings. I mean they left and there was a purpose, but they left and they said, "I can't believe you did that. That was really meaningful."

That is what community is for us. And that is, if you think about the moment, for that moment to happen often, we have to take all of these people who don't like to cook and make cooking fun, and make them good at cooking, and make the results meaningful.

So for us, community is everything. And it's truly so special. And I will say you love it when strategy works because it doesn't always work. There is art to strategy. And in this case, it's working. And in that, notwithstanding all of the challenges that we face in the world today of supply chain and consumer sentiment and transportation costs, the community is what we come in every day and say, "We will protect that with our lives."

Clint Betts

How do you sustain that with everything else going on? Through a pandemic, through Russia invading Ukraine, and somehow that affecting the entire world, through the supply chain issues all, how do you sustain this community and the heart and soul of the company when the whole world just feels like it's crumbling around you?

Jeremy Andrus

So it's a really good question, and I think we really try and pull apart the commercial component of the business, which is how do we make money, and the community and this foundational component of Traeger. The community piece has been interesting. And actually, we came into the pandemic and our grill sales fell off a cliff. I mean I will say for six weeks they almost went to zero. Nobody was buying.

Our pellet sales went through the roof. It's like I need water, toilet paper, Purell and Traeger pellets. But we really didn't know what would happen. Honestly, we didn't know that we would survive it. We had $400 million of debt on the business from a transaction that we'd done a couple years before. And I remember sitting in this room, with my executive team and deciding that the world was scary. It was scary for us, it was scary for our team, it was scary for everyone.

And so as opposed to figuring out how we can sell another grill, you cannot swim upstream against powerful consumer trends. And the trend was we are not spending money on anything but bare necessities early on, that changed. But we said, we have a community of two million trader owners. And because we can't go in these communities and cook, like we do. We have this grassroots cooking program around the country. Can't go into their homes, we can't go into these retailers, but what we can do is we can use content, and we can pivot our digital strategy to get in everyone's living room, on everyone's back porch. And so we started this Traeger Kitchen Live.

And almost overnight, and we weren't even going out and producing these, we were sending production equipment to influencers around the country who were our partners. And we were teaching them how to set it up and do this class on their own because their neighbors couldn't even come over and help them.

And very quickly, we were having 150, 200,000 views of this hour cooking segment every week. And so everything we did was about community. As opposed to trying to sell something that no one wanted, how do we get people's homes and be a part of the solution? How do we make them feel good in their backyards because that's where they felt safe. And our community took off. I mean it was insane what happened. The community got tight, and the engagement metrics went through the roof. And eventually, we started selling grills again.

And then you realize, I can't travel, I can't eat out, I'm making a lot of money. And by the way, the government's giving me tons of free money, which has created all sorts of other issues. And grill sales took off. And it's interesting, and I think it's important to fast forward because what you really want to build is a business that's resilient, a business that gets through hard times. And this is a hard time for us, and it's hard for a couple of reasons. One, the supply chain about, I don't know, 14 months ago, supply chain just turned upside down, particularly supply chains from Asia. You can't get components. If you could get them, they were expensive. Transportation costs. A 40 foot container from China to the West Coast went from $1,500 to $15,000 overnight. And if you told me—

Clint Betts

That's incredible.

Jeremy Andrus

If he said it was going to go by 50%, I would've said, oh no. But when it goes up by 10 times, it's like silly season. It was totally insane. And so margins get crushed. And then we get into the spring. And grill sales are not picking up the way that they had for nine years that I'd been in this business, and we couldn't figure it out.

There was a war in Ukraine, is it the war in Ukraine? Consumer sentiment falls off a cliff, gas prices go through the roof, are our consumers finally seeing inflation? Is it hitting their pocketbooks? And I think it was a little bit of all of those things, but it was mostly something else that we understood better when Target reported their spring earnings, boy this feels like 10 years ago, but it was like eight months ago.

And they said, everything that trended, all of these consumer durables that trended during the pandemic. And they listed lots of them. And actually, the poster child was bikes. You could not buy a bike during the pandemic. And Target said we couldn't keep bikes on shelf, we could not keep them on shelf. And now we are swimming in bicycle inventory and we can't sell them. And they said, but luggage Steady Eddie flat category for decades, luggage is up 50%.

And then you hear Marriot report their earnings, and Delta Airlines, and you realize that consumers said, "We're done buying stuff, we can go to Europe again." And so everyone got on airplanes and they said, "We are buying experiences, not things."

And so I say all this because it's hard for us right now. It's like the trifecta of margins are down, sales are soft. For the first time that I've experienced in the nine years I've been here, and by the way, we still sit on $400 million of debt. And so it's a challenging moment. And so we come in and we say, we're going to figure out we're reinventing our product strategy, our supply chain strategy where and how we manufacture, but that takes time. We're reinventing so much of the commercial part of the business, but we're seeing as long as consumers are more focused on travel than buying things, we're going to focus on the community that currently is in the Traeger hood, that consumer who truly loves what we bring them.

And I'll tell you what's interesting, our community engagement metrics are through the roof. It's like we've never seen. Now we're not bringing as many new members into the community right now, and that'll change.

But the resilience of our business is the community. And so everything we do, and it's interesting, we've pivoted from meaningfully investing in top of funnel marketing, to saying, that is a bad use of money right now because consumers are not listening to us. We can't get a return on that. But what we can do is take all of our marketing funds, and invest them in community engagement.

And suddenly, those that live in our community are stoked. I mean our unaided brand awareness, spending nothing this year on top of funnel marketing, it's up 15% year over year.

Clint Betts

Oh wow.

Jeremy Andrus

It's up 50% in two years. And yet we're not spending any money there. We are only stoking at our community. And the benefit you get from that is your community talks to other people. And so strategies are evolving, but we come in every day and say, protect what's important. Even if we can't make the type of money that we used to make, and we were $110, $120 million of EBITDA, and this year we've guided to $35 million of EBITDA. And so all of those things have changed.

But I think as a CEO running any company, whether it's public or private, and when you run public, you feel more pressure to try to fix problems in the moment, in the quarter, I think you step back and you say, "What is enduring? If I do this right long term, will I win? And how do I make sure I don't sacrifice for current business trends, even if it feels better in the moment?"

And that was a major lesson of mine. I didn't want to be the highest shorted stock on the Nasdaq. That was really uncomfortable for me. And I remember doing things that were short term in nature, around channel and product. And protect culture the way that I believed. Because you think you can fix in a quarter, and then you get through four of these quarters and you got an anniversary, stupid things that you did four quarters ago.

And so a major lesson, do what's right for your organization and for your business every single day. And if you do that, you'll win. And it's interesting for me to look back, I mean if you look at Tesla, Tesla back in 2018, people were calling the end of Tesla. Too much leverage. Manufacturing was not efficient. There are all these issues. And you have to admire Elon Musk for a lot of reasons. But for this one, he said, "We're staying the course. We're staying the course." And we believe that's the right way to run a business.

Clint Betts

And now he's got Twitter and everyone was acting like it was going to go down just last night. It was like all over or something. I think betting against that guy's a mistake.

Jeremy Andrus

I would never bet against him. And it's interesting, as you read about what he's doing, Twitter's going to survive. But if he continued to run it the way that it was being run, it would've died a death of a thousand paper cuts. So you might as well make some bold decisions and build something long term. And it's interesting, I mean I was reading an article this morning on those who were not asked to leave in the RIF, and they got this email from Elon and it says, "We expect you to stay and work hard. We want hardcore workers to stay here. And if you're not going to stay, if you're not committed, three months severance, beat it."

And the number of people that complain about that, it's like, "No, I'm not doing that." And it's like, "Okay, well you weren't a good long-term member. If you're not committed, why do I want you to stay and pay you a full wage?" And this notion of quiet quitters and part-time workers and those who work across multiple companies, it's become silly season. It's interesting—

Clint Betts

It's weird.

Jeremy Andrus

It's weird. If you look at when my dad in his career and companies had all of the leverage, and the leverage really started shifting. I would say over the last 10 years, the leverage, the tables turned, and the employees had all the leverage. And notably since the pandemic, everyone went home to work from home, they said, "We're not coming back." It's the hottest job market in the history of the world, particularly for tech talent. And competing for that is atrocious. It was atrocious.

But then Facebook, first layoff in the history of the company, 11,000 people, Amazon, Microsoft, Twitter, 50%. And suddenly, I think it's going to create a more balanced equation between people and their companies that they serve.

And it's not to say that the old way of pounding your fist and demand results is what we're going back to. It's not the Wolf of Wall Street that we're going back to, but I think it's a little bit more balanced where it's our obligation as employers, as CEOs, to build a place that's meaningful to people that has mission and purpose and that inspires and that develops, but then people are expected to show up and really contribute.

And so there is an economic cycle. These cycles are interesting. And to suggest that we're heading one way forever, it's just never the case. You look at when Alan Greenspan wrote Irrational Exuberance and he just talked about this notion of when your shoe shine or your barber starts recommending stocks, it's time to sell. And what happened? It all crater.

And then you fast forward when everyone's building houses that have no background, flipping houses in '06, '07 and they're getting 10% returns every month, it's time to sell. Guess what? It was time to sell. You look at crypto and—

Clint Betts

That's probably the best example of that.

Jeremy Andrus

Recently. And you look at, I mean FTX, the silliness of the lack of corporate governance and controls and sloppiness, and maybe fraud, we'll find out. And these things reset and they come back in balance. And that's why I think as a CEO, you step back and you say, "What are the principles that I believe will be here forever?" What are the principles of leadership, of motivation and development, of communication and trust and transparency? And of economic alignment, of purpose and mission alignment? And I think if you anchor to those principles, in these silly seasons when things ebb and flow at the margin, you may lose people, you may have challenges, it's never going to be perfect, but you can bet on some of these things surviving long term. And that's where stability comes from in an organization.

Clint Betts

Do you buy into this idea of you're either like a wartime CEO or a peacetime CEO? And you're really good at one or the other of those things? And to me it does seem like Elon Musk, I mean If you're going to war, you want him at the helm, right? That's somebody who is probably the perfect example of a wartime CEO. I imagine assuming he gets Twitter to a good spot, I can't imagine him leading it when it's fine, that doesn't feel like his bag. Whereas you got Samuel Bankman-Fried or whatever his name is, that is a peacetime, everything has to be the perfect type of CEO or else it's game over. And how do you think about that?

Jeremy Andrus

Yeah, it's an interesting question. He wasn't even just a peacetime CEO. As a CEO, he was a fraud. I don't know if he did fraudulent things, but I hate to say, the more I read about him, a total joke. A visionary, a technology visionary, but it turns out and by his own admission, full of crap more than he even believed what he was saying.

Clint Betts

Oh for sure.

Jeremy Andrus

So, I actually think there are good CEOs. It's not wartime and peacetime. And it's interesting looking at this industry, good tailwinds make everyone look pretty good. And we've had a lot of competitors come into this industry and I looked at them and I'm like your product sucks. The experience sucks. Your customer experience, your service sucks, your digital experience sucks. And yet they're surviving, and they're growing them like what is going on? All of these investments we're not getting paid for.

And those brands have been calling me for six months saying, "We're for sale. We'd love to partner and merge with Traeger. And by the way, can you do it fast?" And you know exactly where they're going, they're not going to survive. And actually one of these brands, they'd actually built some interesting product, but they could never make the commercial model work. Great conversation with the founder three or four months ago, we declined. And I got an email last week, and it was the email chain with the CEO, but it was the lender. And the lender said, "Hey, it's a different conversation now. We're selling inventory, we're liquidating their inventory."

And so these entrepreneurs were made to look pretty good in tailwinds, but number one, they weren't building something that was going to last. And number two, being a wartime CEO is a totally different set of capabilities. And the reality is, unless you want to hire and fire your CEO according to the economic cycle that you're in, you have to hire wartime CEOs. And they're good when they have tailwinds, because what you do in war, you're reconfiguring your business to come out, to really shoot out of the gates very aggressively because of how you reposition. That's what makes you more successful when times are good.

In the frothy times, everyone looks like they're pretty good, but most of them are not. And I say this because I didn't used to be a wartime CEO. I mean it was hard. Some people I think inherently have more grit and stamina and just like a willingness to grind through things. And that's always been in my DNA. But there were things the last time I went through this that were really hard for me. Around top grading team, shuffling team, saying goodbye to lots of members of team, being willing to make hard decisions, to cut out whole chunks of your business, to reimagine your future.

And you have to do those things in hard times. So I came into it with a disposition, but I wasn't great at it and it was painful. And I will tell you, having been a wartime CEO now for this is my third time, and having the cumulation of all of these hard experiences. And recognizing that there are patterns and you learn from them, but no one pattern, no one moment is the same, but you have the confidence to make hard decisions and to get out of bed every morning, and to grind every day. And I'll tell you the step further that I'm finding myself in this joyful moment right now and it's the messiest thing I've ever been through in business.

And I have a great board. I mean I have a board, one of my board members ran McDonald's. One ran Under Armour. They sit on the board of Lowe's and Eli Lilly, one's the president of Milwaukee Group from 400 million to $8 billion of revenue. And I've heard a couple of them say, "This is hard. We've never seen anything quite this hard." Other than the president of Milwaukee, went through something similar and it's great to have his perspective.

And you know what? For me, when this moment started again, and I'd internalized this in a prior moment, a couple of things, I'm never going to lose years of my life for my profession. Life is too short. We don't don't need to make money to put food on the table anymore. It's so much more than that for me now. This is the golden moment. My children are between six and 14 years old, six kids between six and 14, heaven forbid I lose three or four years of that.

But the others, I think you realize when you go through hard things that adversity is a great thing when you look back and you say, that made me. I don't ever look back on 2017 for example, we sold two-thirds of the business, a billion dollar valuation. We had grown a ton and that was an exciting moment. And I love that we made so many people financially secure in this business, but for me, we didn't need the money to live and the year was easy. I mean, everything went right. I don't ever look back on 2017 as a year of growth. In fact, I just don't think about 2017. But I think about 2011, 2012 at Skullcandy. And I think about 2018 at Traeger, which had some challenges.

And I'm going to look back and I'm going to think about, let's say back half of '21 through the end of '23 or '24. And what I realized is if you go through adversity with the right attitude, it's what makes you. And what I'm really trying to master this time around is not simply benefiting looking back, but being in the moment and recognizing what I'm feeling, what I'm up against, how this shapes me, what this is going to help me develop into as a leader and as a human being. And then figure out how do I find intrigue and interest in joy in solving the hardest problems that I've ever solved? You know what? Probably the hardest problems I will ever solve professionally.

And the great thing about it is, I'm loving this moment. I'm loving it. It's painful, it's hard, but it's like when you lift weights and you're pressing or squatting, it's like this is freaking painful. Why do you keep doing it? Because you're looking in the mirror and saying, I'm getting stronger, I'm getting better.

And so I'm finding a way and I'm trying to make this contagious in my team. I'm loving the complexity of what we're doing. It's really cool. Now do I prefer winning? Of course. It's just not an option I was given right now. It's not on the menu. It's really cool as a CEO, when you go through hard things and you realize the last time had I gone through this four or five years ago, this would've broken me. Ten years ago, forget about it. No chance. You know what? We're going to get through it and we're going to be really successful. And the next time something really painful, challenging in life approaches me, I'm going to get through it because I've been through hard things. And it's not just professional.

You take all of the capabilities and the qualities and the confidence with you, whether you build it in your personal life or your professional life, they're also intertwined. You own those. And that to me is really exciting. And it's exciting that this moment doesn't feel like a burden.

And because when it's just a burden, not only is it no fun and you lose years of your life, but I just don't think you can solve problems as creatively as resourcefully with real clear vision when they're burdens. But when they're interesting, suddenly it's like, "Boy, take off the gloves. You're going to find great solutions."

Clint Betts

How do we get out of this? The news is like, half great, half bad for consumers. It seems like it's all bad. I don't know if there is a single consumer brand that isn't down a ton. I mean you look like Peloton, which was the darling consumer brand. It doesn't make any sense that... How do we get out of this?

Jeremy Andrus

And Peloton's an interesting one because I rode my Peloton this morning. It's a great product.

Clint Betts

It's got a great community even, right? They've done a lot right.

Jeremy Andrus

It's a remarkable brand. How do we get out of this? For better for worse, we don't all get out of this. This is part of the cuing process of an economy, and it's the invisible hand that fixes it, that takes care of all these things. And it's the intersection between things right sizing themselves, inflation sizing itself. Consumers cash, it's still there, but the cash has got to be spent. The consumer has got to go in debt because they always do. They're going to start buying things on credit cards. It's going to get painful. And then interest rates will come back down, business will start to reinvest.

These cycles are really interesting how they take care of themselves. And then you know what? It's survival of the fittest. And this is where, as a CEO you have to step back and there's some reinvention. We are seriously reinventing so many components of our business, and you don't get paid for it for a while because these things take time.

But you also have to acknowledge the cycles that you're in, and build strategy against those cycles. So I'm not built to play defense, it's just not in my DNA. But you know what? This is a moment where we're playing defense, and we're focused on liquidity, and cash, and margins. And it's like, it was all about growth for eight years. And then we said, our focus is going to turn to stability, as we reinvent the future. And as the consumer gets stronger. And then you lean into it.

So as we think about the next three years of strategy, it goes from a very defensive posture, to building a very aggressive posture. And the best brands will survive. And part of this process of brands going away is healthy, because a lot of bad investment, investment chases bad companies in really frothy times. And you know what? No one's invested in outdoor cooking for the next four or five years. No one. You just wouldn't. Investors are often lagging indicators of things that are working.

And so we're going to see attrition in this industry. We may see some cuts, some consolidation. We're not going to see new players come in. And we're going to survive because we have the best team, we have the best strategy, and we're going to execute the best. And when we come out of this, we're going to be a better company, we're going to have less competition, and we're going to figure out a way to speak to our consumer with a better voice. And so these things, they really do take care of themselves. And look, you just hope to be the one that survives. And I think it's natural.

And by the way, this is another one of my thought processes, it really gives me energy right now, is that I love the fact that my competitors aren't going to survive. I know some of them are not going. Weber, who's like multiple times our size, has a billion and a half dollars of debt, they just raised emergency capital, and they're saying they've got to go private to restructure. I love that. No disrespect. Great business, great product.

But you know what? They'll survive because they're the biggest, but when they survive, they're going to come limping out of this thing and we're going to come out swinging. I look at some of my other competitors and we just hear bits and pieces through the grapevine. And if they survive, they're going to be wounded. And our goal is, it's like this cliche, this is where you capture share. And you don't get paid for it in the moment, but it's one you position. So I think it's healthy. I hope we're one of the survivors. I think we will be, I feel pretty good about it.

But we have some real structural challenges in the economy. And for decades, we've just become drunk on low interest rates and borrowing. And that's not like that's sustainable. And so you can't fix decades old problems quickly. The Fed is committed to breaking the consumer. They have to. They have to. And so we think about that in our strategy.

And so it's going to take time. And it may not be as deep as the great recession of '08, '09, et cetera, but I think it could be longer. I think we're going to see interest rates hit really meaningful highs, and I think they're going to stay there for a while. So this is going to have to work its way out.

The other piece that I think is interesting that we've got to think about as business leaders is the geopolitics of the world that we live in.

Clint Betts

Yeah, it's weird that you have to think about that now. You have to think about geopolitics as a CEO of an outdoor grill company. And we all have to, you have to, what's Jerome Powell going to do? You have to factor that in.

Jeremy Andrus

You do.

Clint Betts

What were you thinking about that in 2017? I don't think you were.

Jeremy Andrus

Hell no. No. We thought about ourselves and our competitors. No, this is multifaceted because you've got to track the macro, you've got to track the Fed, because that influences strategy. And geopolitics, we manufacture in Asia, we manufacture a lot in China in fact, it's probably two thirds of our manufacturing.

What's going on, what's going to happen in China? President Xi, he seems less motivated by the economy, and he seems a lot motivated by his legacy. And China thinks in terms of hundreds of years. And they're willing to do hard, they're to do really painful things. We think in terms of four year election cycles. And so what happens, I'm not going to say if, what happens when China and Taiwan unify? How's it going to happen?

Look what's happened in Hong Kong. I mean, it's a hot mess. And it's going to happen. And I was at a small CEO summit with my private equity partner and they brought in a geopolitical expert on China and Russia. And fascinating, our European strategy is going to change because of what's going on in the Ukraine. We manufacture China, and what happens if and when China takes over Taiwan? Either will say semi-peacefully or not. And we had John Huntsman over to Traeger a couple weeks ago with half dozen CEOs, and talking about someone who knows China and Russia, having them—

Clint Betts

Ambassador to both.

Jeremy Andrus

And asked him for his perspective, it was fascinating. He's vice chairman of Ford. So they've got exposure there. You've got to think about these things now, because most everyone listening to this, they're not going to remember a career that didn't have geopolitical stability in the world. We have skirmishes that we call wars in Iraq, in Afghanistan, and in Eastern Europe, Ukraine. But the world is now geopolitically contentious and unstable.

And some of us remember growing up in the '80s. And in the Cold War, and thinking about what they made. And that socially, it was frightening. But then we had decades of peace since the wall came down and the USSR imploded. And I think in the next couple of decades, geopolitics and running a business of any meaningful size, they're going to be highly interconnected. So look, you got to be a wartime CEO, and you got to have a stomach to charge through these things.

And then you have to enjoy life at the same time because it's meant to be enjoyed.

Clint Betts

Well, it's interesting too because when you're building a company or anything, you're not really focused in the early days on anything other than yourselves. How do you survive? How do you get product market fit? How do you build a community? All this type of stuff, right? And then all of a sudden you're like, "I got to worry about what the president of China's going to do in Taiwan. I got to worry about Vladimir Putin, what are his intentions with Ukraine?" That makes no sense.

Do you see this making more companies become more political, more CEOs getting more engaged in the political realm, particularly in the United States around campaigns like the 2024 election, the presidential election? Do you think people get more engaged and more vocal there? Because historically, except for on the margins, businesses and business leaders usually just stay out of that.

Jeremy Andrus

So it's a really interesting question. I think these are unchartered waters. And it becomes more and more clear to me that politicians don't understand business, they don't understand the plight of an operator, and they don't know how to build the right policy to protect American business interests. And I don't want to overstate that because I think some good things have been done recently.

By the way, John Huntsman, I mean, I sat with him and said, this guy, he's a business leader, he's a political leader, he understands geopolitics, he understands leadership. He's like one of the few people I've ever met with. And I would put Senator Romney in that vein as well because he built his career in business. But very few politicians understand how to craft policy that protects US business interests.

And the rare exception actually, recently, the CHIPS Act, where Congress started to understand strategically we are beholden to China and Taiwan, for most of our semiconductor manufacturing. And they did a great thing in creating incentives to strategically bring that back to the U.S. But that's a very rare exception. And I think as business leaders, we are going to have to figure out how do we partner with politicians to really help them understand what are the challenges that we face, and how do we work together to craft legislation that's appropriate And then I think we're also going to have to understand that's a long process.

But the flip side of the coin is, you're a market taker of whatever the geopolitics are, and you've got to build your business around them. And you have to anticipate that. And so it's just more complicated. And you're right, early on in the business as an entrepreneur, it's about product. It's about product market fit. And then once you've built this product market fit that works, then you start selling it.

But these are early survival days. As you get to a certain scale, you realize you can't just be insulated. You actually have to understand all of these macro and political things going on, because they will affect businesses as they grow, more so than at any moment in time in our lifetimes.

Clint Betts

You said something that I think is true where you said, politicians don't understand business leaders, or operators and that type of thing. I think that the reverse is also true. I wonder if business leaders and people from business understand politicians. And why do you think that disconnect exists?

Jeremy Andrus

So I think that's a great comment, by the way. And it's interesting when you look at Americans' view of politicians, and in many cases, it's well earned. But I actually have a perspective, having grown up in D.C., and spent time on Capitol Hill in D.C. In having become more involved in Utah, and having watched my wife, Kristen, get much more involved in politics here. I think we have a lot of really well intended, really smart, really hard working people serving our state and serving our country.

And it's easy to say they don't understand. But your comment is a really interesting insight, which is, I also believe that we don't understand. When you're an entrepreneur, you build it, you go through a brick wall and you do all these things, but that's not how policy and legislation gets formed. And I don't think we do understand the process. And so I think there's a lot of learning that could happen on both sides. And I think we need to spend more time together. I think we need to trust more. I think we need to seek to ask questions and understand. And I actually believe that if there's a willingness to do that, that can be really effective.

I'm not from Utah, I've been here 17 years and I've come to really believe it's a special place, and it's a place that can innovate not just in technology, but public private partnerships, and bringing together legislators and business leaders in creating innovation in how we get things done. So I'm glad you raised that because I've come to actually really appreciate and respect many of the politicians that get a little bad connotation. The political leaders of our state, whom I believe are doing good things.

Clint Betts

Well in my experience is with a group of entrepreneurs and through Silicon Slopes and various things we've done, our attitude, as you mentioned is let's move fast, let's break things, Let's just plow through the wall and all that type of stuff. And we're like, why would we not just do this? What doesn't make any sense? We were trying to get a university's name changed in Southern Utah, and we're like just change it. What are you talking about? And the politicians, they're like, "We'll change it, but wait a sec, there's a whole process here." They're like, "There's a whole process here and we got to take everything into consideration, and we got to really work towards consensus and all this type of stuff."

And yeah, for us, we're just sitting there like, "What? Just change it and let's move on to the next agenda item." And they're like, "That's really not how it works. Not even close."

Jeremy Andrus

That's not how it works. And look, I think if you step back and you understand, as an entrepreneur, you're the stakeholder, your team's a stakeholder, your customer is a stakeholder, so why wouldn't you move fast and break things and go through any brick wall to serve your stakeholders? When you look at society and you look at communities, the breadth of stakeholders is so wide, and it's so easy to forget that it's not all about you. And it's important.

Now, that's not to suggest that legislation and investment is always about the lowest common denominator, but there's fairness and there's equity and there's contemplating those. Everyone's important. And that's a different mentality than an entrepreneur. And that's why I think, you put an entrepreneur and a political leader in a room, and if they're not well intended, and if there's not a level of humility and willingness to ask questions and learn, what you find is everyone digs in their heels, and they leave saying, they have no idea what they're talking about. There's such a better way to do this. And I think there's value to both perspectives.

And actually, do believe that there is innovation and there is speed, and there is perspective that the private sector can bring to government. I really do think there are things that can be done better, but I also believe that there is a need for us as business leaders to understand why they do certain things the way that they do, and acknowledge that some of those approaches are better than the approach of, let's charge hard and fast and we're going to lose people along the way. That's just not how it gets done. And I think that's right.

Clint Betts

You know what? The thing I think that needs to get solved in that equation is the incentive on both sides. Politicians don't really need business leaders. In fact, it's actually pretty politically advantageous to run against big business leaders, right?

Jeremy Andrus


Clint Betts

And the reverse is true too. Business leaders don't really need politicians, right? But without figuring out what the incentive is going to be, why get in the room and why try to figure out how to do this and do it for the betterment of society? I think that's the thing that needs to get figured out first and foremost, is how do you figure out why they should be working together instead of against each other? Because the natural thing is to work against each other.

Jeremy Andrus

It is. And look, I agree with the comment that the need doesn't exist in the near term, nor is it always obvious. But I think if you step back and you contemplate what might happen if we meet in the middle? And we bring some innovation to government and to process, and we recognize on the private sector side, that there's a way to do this which is, let's consider our stakeholders, let's measure twice and cut once. And that's just not what entrepreneurs do.

If we understand there's value to both perspectives, what might we accomplish if we work together? And so then you step back and say, "Well, I don't need it, but if I'm willing to think about possible outcomes and abundance mentality, what might we accomplish? Those are the incentives. The incentives are, we can do more together. But it does require humility and it requires patience, and it requires willingness to learn.

But I'm a big believer that if we figure out how to work together, and I've got some limited views of business leaders and politicians working together in public private partnerships, and you see that happen and you realize, it was good for so many, it was good for so many. Neither one would've done those things on their own, but together, they did them. And society benefited. I think it just requires looking at problems from a bit of a different perspective.

Clint Betts

How do you keep your optimism? As we close here, and keep your team optimistic and keep everyone around you optimistic as the headwinds are so strong?

Jeremy Andrus

You know what? I've thought a lot about what drives people. What drives them the near term and what drives them long term. And we're not going to win next year. I can't stand in front of my company and say, "Consumers can get stronger. Inflation's going down, and we're going to freaking crush it." And so happiness is not the PNL. The PNL, it's the output of all of the things that you do. And so, we've spent a lot of time thinking about how do we double down on culture? Culture is important.

Culture's important at all times, but it's actually more important than the tough times. So how do we make sure that our culture is elevating human beings? How do we make sure that it's driving more sense of purpose and belonging? How do we make sure that these people are finding a willingness to get better, and a belief that we're investing in them? How do they find joy in getting better as human beings?

And then how do we give them a long term vision of what success looks like as a business? Ultimately, economic alignment does matter. Financial security's an important part of life. And so, we're honest and we're honest and transparent around the challenges that we're going through, but we look a couple years ahead and say, "Look what we're doing now." And how this is going to play out in two years. This is going to be incredible for us. And then as you're going through the grinding moments, when the business commercially isn't generating cash, it's not growing your margins or struggling, how do you gamify the moment that you're in? How do you find opportunities to gamify and then celebrate wins and build energy?

And this is to me, honestly, for me, step one as a human being, as a leader, was figure out, how do I do it myself? How do I bring myself through this optimistically? But it's really cool when you start to look inward and saying, I'm good. I can't lift someone when I'm not on the pedestal, but I am. I'm good. I've got this. Now, how do I share that? How do I bring other people along with it? And this quality of leadership? To me it is, "Why did I come back to do this a second time?" I wanted to be a better business leader, period. I wanted to be a better leader.

And so it's interesting. I mean, we had to let 100 people go. It's 18% of our workforce. I've never done that before. That was hard. How do you get people back together when this, Traeger, feels like a family. The culture feels like a family. How do you bring people back together and say, "We loved all of those people. We took really good care of them." But this is it now. This is the team now. And then how do you infuse optimism and energy?

And I don't have all the answers. I am a work in progress, and I'm really, every single day trying to figure this out. And what's cool is I feel like I'm a lot better than I was three months ago and six months ago. And you know what? Then you got to wake up and be optimistic every day, and you got to practice what you preach.

Clint Betts

Jeremy, this is an incredible pep talk going into next year. Thanks so much for coming on and for talking and really being as open and honest as you were my friend. Thank you so much.

Jeremy Andrus

Good to see you, Clint. Great conversation. I really enjoyed it.

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