Success Stories with Marshall Atkinson

Success Stories Ep 52 - "I do not believe in price lists"

September 14, 2022 Season 3 Episode 52
Success Stories with Marshall Atkinson
Success Stories Ep 52 - "I do not believe in price lists"
Show Notes Transcript

One of the true legends of the industry is Mark Coudray.  A master printer, forward-thinking entrepreneur, and mentor to a myriad of shops in the industry.  Mark has helped scores of businesses across the globe reach their profit potential.

On today’s Success Stories podcast we’ll take a look back to the past, and also be scouting out the future, with insights from one of the most popular figures in the decorated apparel industry.

This is an episode you won’t want to miss!


Marshall Atkinson  
Welcome to Success Stories brought to you by S&S activewear. I'm your host, Marshall Atkinson. And this is the podcast that focuses on what's working so you can have success to one of the true legends of the industry is Mark Coudray. A master printer forward thinking entrepreneur, and mentor to a myriad of shops and people in the industry, including me, Mark has helped scores of businesses across the globe reach their profit potential. On today's Success Stories podcast, we'll take a look back to the past, and also be scouting out the future with insights from one of the most popular figures in the decorated apparel industry. This is an episode you don't want to miss. So Mark, welcome to the Success Stories Podcast.

Mark Coudray  
I'm happy to be here, Marshall,

Marshall Atkinson  
I can't wait to dig into this. And one of the things I really love about you is you're always 784 steps ahead of everybody else. And I think it's gonna be fun to kind of dig into where you've been, but also where you're going. Because I think a lot of that is going to resonate with a lot of people. So let's start off with just your origin story. Right? So let's take you back to the roots of getting in the industry, because I think that really sets up a lot of things that you're working on. So let's compare trying to grow a business back then, as compared to what's going on now.

Mark Coudray  
Thanks, Marshall. Well, like so many people, I got into this business by mistake, I got thrown into a graphic arts printing class, my senior year in high school. And the instructor said, I haven't got time for you. I've got disciplinary actions with all these other students. Here's this box of screen printing stuff that you Landau sent, experiment with it for 10 weeks and tell me what you've got. But just stay out of my way. And that's how I got hooked on screen printing. And then the next semester, I signed up for the class. And he was able to get me a job with a screen printer. And very, very quickly. I took his business over at 18 years old and handled all the production reduced his spoilage rate from 25% to six tenths of 1%. And was basically a hero in his eyes because I was making a ton of money for him. And he paid me really well and that everything was great until the next summer, which was the end of my first year of junior college. I was in engineering program, and was starting my mechanical engineering journey to become a mechanical engineer. And the first week of June, he was doing government contract work and his contract number got left out of the approved list. And overnight his business stopped. So what he told me was go fill out unemployment for six weeks or so we'll get this straightened out and then we'll be picking it up and get going again. And I told him I said look, I can't do that I you know, I need to make my money during the summer because I needed to for school in the fall. So I went down, did the unemployment thing stood in line filled out the wrong form. They told me to go back to the end of the line, fill out a different form and go back to the end of the line, crumpled up the paper and said Enough of this went to the bank took about $200 from my savings account and started sir graphics. It was an amazing job. My parents let me use the garage to set up I built my first poor color printer. And it was pretty successful right away. It was starting to make really good money that fall I was taking my calculus final. And the lights went out because of a storm. And I had one of the first handheld calculators and I was doing my calculus preparation for my final by candlelight with a handheld computer. And the irony of the situation that just hit me like a bolt of lightning. I said you know what this process screen printing is so versatile. And it's going to collide with technology, whether it likes it or not. It's a craft right now, but it needs math and science. So I literally the next day changed my major from mechanical engineering to basically printing engineering. And at that time, there were only really two schools that offered a Bachelor of Science degree in imaging sciences. And one of them was Cal Poly which was 100 miles north of where I was living in Santa Barbara. And the other was RMIT in New York, which is like wintertime snow nasty didn't like that. And it was a state school so it was practically free to go there. So it was an easy overnight

Marshall Atkinson  
decision at California. guy is not going to New York

Mark Coudray  
No, not even close. So it was like a, ya know. So I went, I took my business with me to Cal Poly, and I was running it full time while I was getting my degree. It was the unbelievable ideal learn by doing education. And I took all of my elective classes and really serious programs like organic and polymer chemistry. Those were both electives. statistics were electives. Managerial Accounting, which was a junior level accounting series was an elective. In fact, I took so many heavy duty classes in my elective series, that my last quarter, they wouldn't let me take any more, they forced me to take a meat cutting class and a woodshop. And it was like, This is crazy. But anyway, I graduated, I literally walked away from my last final and went to the bank and signed the paperwork on my first six color automatic, which was a big deal at that time, because there was hardly any automatics in the industry. And that was a six color precision oval. And that was the beginning of the rocket ride. This was in early 1977, March of 1977. And we went from inflation adjusted dollars of $200,000 of annual revenue, which is where we were hand printing, got the automatic delivered in late August. And over the next 18 months, we went from 200,000 to 4.5 million in 18 months, with no outside financing, no computers, no spreadsheet, no internet, no social media, no email, no fax, the only thing we had was a phone and some really, really great shirts. And I would go out and pitch the deals and bring in large orders. And we were doing 10s of 1000s of shirts a week, it was just amazing. And it was mostly rock and roll. But there was also some really big corporate orders in there as well.

Marshall Atkinson  
And I remember you talking about doing some of the first shirts for Apple, and some of the other big companies. And I think you know, one of the highlight shirts that you're known for is that whole Nocona boot series foreclosure process. I think that really kind of like put your stamp on a lot of things.

Mark Coudray  
Yeah. And I still have samples of those from them. In fact, I was just looking at him yesterday, showed it to a guy that wanted to enroll in the catalyst program. And I was showing him what it was like when we started. And that shirt that at this time is 43 years old. And his comment was, that's incredible. But what's better than almost everything that's out there in the market today. And that's because my senior thesis to graduate was limitations of halftone screen printing to 85 lines per inch. And that was literally almost 50 years ago. 1975 is when I wrote the thesis. So it's been a long journey. But my philosophy has been that we need to bring the math and the science to the process. If I can make an idea work with the math behind it. If I can prove it out, then I know it's real, and it's going to get results. And to this date, you know, this is five decades now my SIR graphics will be 50 years old next July, over five decades that philosophy has run true. We've worked within systems were developed, along with Newman, the high tension, low modulus mesh that everybody uses today and takes for granted simulated process for color process. I brought the physical science to that dot game, Moray, all of that work was things that we did back in the late 70s and early 80s and into the early 90s. So it's been a great journey. And it's been a fantastic career along the way. You know, you made a comment about being 746 steps ahead of everybody. That's been one of the challenges actually, is that I iterate I think ahead, I solve problems, I move ahead. And I've created ways of thinking about things that allow me to test out hundreds of different scenarios. And it's hard for me to remember and connect the dots for people that are on a journey moving along way back to where I started. So it's always an issue for me to be approachable and to and to communicate the ideas because I forget how many steps are on in between.

Marshall Atkinson  
And so that's the past. And that's great. So let's talk about what's going on. Now. We're coming out of COVID. Everything's going crazy with inflation right now. And people are really concerned about things. And we've got this giant opportunity in front of us. So talk about where we are now in industry and what you're working on in relation to where you've been.

Mark Coudray  
So one of the things that I have a history of going back to when I was 13 years old, is being able to research based on the history of an AI via. So everything, my experience, again has been that the original creative research, the academic research, the scientific papers, a technology is almost always 50 to 100 years ahead of when it actually starts to show up. So right now I'm going back into the 40s, and the 50s, sometimes the 30s. And looking at what people were writing about, during that period of time, what was happening to the money supply, what was happening to growth, what was happening coming out of the depression, what was happening coming out of World War Two, what happened when we were in inflationary situations, which we've had many, many, many examples of, this is the same situation, but really orders of magnitude higher than anything we've ever seen. And I don't want to be a downer, you know, a Debbie Downer out of this. But we've already been through, you know, the major disruption of COVID, which was really difficult for a lot of people wasn't so hard for me, because I already know how to prepare and deal with unexpected disruption. And coming forward, I knew we were going to have an inflation just because of the way things work and the way I've seen things in the past, over the last half a century, I lived through the hyperinflation and the interest rates that were 23% and 7980 81. And that was during the gogo years when we were doing crazy business. And we needed money, and we needed financing. And it was just not a pleasant period. And I'm afraid that we're heading into that again. And so what I'm working on right now is it occurred to me a few years back back in 2015, that we have pretty good vision of our past, we have good remembrance of it, we can see what happened. And we're living in the moment, the present, everybody can deal with that. But we have uncertainty about the future. And so I have been working on using machine learning and artificial intelligence to build models, experiential models that we can use to predict the future, I call it brake lights on the freeway. And anybody that's worked with me for any period of time, has heard me say this over and over and over. And I've got a pretty good track record, I would say. And largely you can verify that or validated when I talk about things, they pretty much end up rolling out because they're based on the past. And one of the things in mathematics is that you can use the past to predict the future, it's like following the line following the curve. And if you've got enough data in there, you can predict the future by following the trend of curve. And that's kind of what we're doing right now is we're building predictive models that are based on prediction of the market size, the market growth, the changing technology. It's a multi dimensional multi perspective, situation. And I find myself being radically immersed in it, not just for our industry now. But for all small and medium sized businesses, businesses up to about 100 million in size, because companies that are this size that are small, typical mom and pop type businesses typical half million to a million dollar businesses, which represents so many people that listen to this podcast, they're flying blind. And they're just so busy right now being immersed in the turmoil and the chaos of trying to get work out trying to find shirts with the supply chain issues, trying to get labor lined up, dealing with customers that are coming from shops that went out of business, trying to filter out the good customers from the bad customers. They're so in the weeds, they can't really see the bigger picture. So for me, it's essential that I step out of that chaos, and basically climb the tree a little bit, look at the forest for the trees, and then communicate that to the people that are close to me so they can deal with the preachers and the other consultants and the other suppliers in the industry that are looking for clarity as well.

Marshall Atkinson  
What should people be thinking right now looking at their brake lights on their freeway? What are one or two things that they should be considering?

Mark Coudray  
This is a great question. The last two years money has been plentiful. There's been PPP money, there's been ERC money, there's been a huge boost in business because competitors have gone out of business. We've been able to raise our prices. You know, we've done so much work with profit first. And we've changed the way that people think about cash flow and about getting paid first upfront. We've changed the fundamental way of how businesses work. And I think this is giving most businesses a false sense of security. The key thing that we're going to deal with is that inflation is a tax in the sense that your money is worthless. US, it takes more money to buy the same products if you can even find them. So preservation of your cash is critical, you know, going out and buying new equipment, buying new loans taking up new debt, I would be highly cautious against that. If you think back to 2008, what got so many people in trouble was, they had cheap money, and they qualified for loans that they weren't really able to pay back. And when the interest rates went up, which they did, which is exactly what's happening right now, we're expecting today, a three quarter to one point increase in the interest rates today, if that happens, you're going to see a huge contraction in the stock market, which is exactly what happened in 2008. And all of a sudden, if the market slows down, and business slows down, and you have a lot of debt, and not enough money to pay it back, you're done. You run out of cash, you're out of business.

Marshall Atkinson  
So let's switch gears a little bit.

Mark Coudray  
And there's a lot going on. There's a lot going on,

Marshall Atkinson  
right. And I think this kind of dovetails a little bit into what you're just talking about. Because, you know, let's talk about the principle of developing a relationship of trust with a client. And I think if we want to be stickier with our current customers, and we want to get out of commodity pricing, we need to develop a higher level relationship. Because when our customers appreciate the value that we bring, it started about price anymore, because we're solving problems. So what should people be thinking about a little bit mark,

Mark Coudray  
you've got to change your view, every shop owner that I talked to, it's all about how busy they are taken work to make sure they pay their bills, it's all about me, me, me, us, us, us. I want to grow, I want to get new equipment, I want to do this, I want to do that. It's all about you. It's all about me to develop trust, your view has to change and move a couple of steps up the food chain, your focus and your energy and your understanding and your commitment and your effort and your compassion. And your empathy has to be 100% directed toward your customer. And understanding how your product creates a result for your customer. And since we're in the brand business, and we're using garments and apparel to connect our customer to their customer, that's where your focus should be, how can I create a better relationship for your customer to their customer, if you guarantee that, then you guarantee your existence.

Marshall Atkinson  
And it's not about the ink on cotton, it's about the solution that you're bringing and helping your customer with whatever their challenges are

Mark Coudray  
exactly those that have been close to me for a period of time know that I'm a huge believer in story. For a year or so I was a story brand certified consultant. There's a few of them in the industry in our industry that do that still. But the key thing is that every t shirt tells a story. And we want that story to be the story of our client and how that story connects them to their client. So whether it's a festival, or a music event, or a school, or an athletic team, or whatever it is, you're representing a lifestyle, you're representing a belief you're representing a cause you're representing a position, these are all emotionally driven. And when you put emotion into the equation, you step away from being commoditized. You can't commoditize emotionally driven outcomes.

Marshall Atkinson  
But more how do I put emotion on my price list. I know there's somebody out there that's thinking that right now.

Mark Coudray  
So I don't believe in priceless. I do not believe in priceless the value that you bring, you know, when you talk about this difference between commodity as soon as you put a price list out there, you're commoditizing yourself, the customer has something that they can shop you against somebody else. So you've commoditized yourself by doing that. The key to this whole thing is understanding the value that you bring. And how you understand that value is by understanding the value to your customer. So let's say that you've got XYZ company and they sell into a specific market. It could be a group, let's just say that they've got a festival. Well, how many people come to that festival? Well, you know, it's kind of weird with COVID and everything. You know, our best year was 2019. We had 26,000 People came in 2019 and 2020. We didn't have anything 2021 We were down with to 17,000. But of those 17,000 15,000 will repeat customers. Wow. That tells me that there's a connection to that Festival and the people that are there. So everything And I want to do is I want to create a way to magnify the significance of that festival over the period of the coming year, I want that T shirt to be the favorite shirt in that attendees drawer, I want them to say, oh, I want to wear the festival shirt, but it's in the Washington dama. When it's out of the wash, and they're wearing it, and the graphic on, it's a great graphic, and it's meaningful. And it's iconic, which is the quality of design, when the design is great. And it's significant. And it captures the emotion of that event, the person that's wearing that shirt, it's going to tell the story of the event. And I guarantee the next year, that event, the attendance is going to go up because more people have seen the shirt and heard the story about it. That's valuable. And from that, we can monetize that and figure out how we're going to go. Now obviously, we can make a whole show just after that. And maybe we will. But you know, I've done many, many, many programs over the years where it's like, whatever the cost of t-shirt is, tell me what it's going to be, I don't care what it is. And even if it's somebody like Walmart, or Kmart, or target or somebody like that a mass retailer that seems to be so driven by price, they're not driven by price, they're driven by one thing and one thing only, how much return on investment per square foot of store space, what's the turnover of that retail store space, if I can accelerate that they don't care what I charge. And if they base their selling price on the margin of My garment, and I sell them a more expensive garment, they're gonna make more money faster, with a more expensive garment. So it's all about understanding the pieces and how the pieces work together. And unfortunately, this requires some math, which so many people in this industry are just freaked out about, as soon as I say math, I might as well freak them out. But when you understand the pieces and how the pieces work, it's just a matter of driving them forward.

Marshall Atkinson  
Right, right. And you're not saying don't use a price list, because I think we still need a standard for coming up with how to quote, you're just saying reassess how you're building that correct.

Mark Coudray  
I think Marshall, this is one of the areas that I diverge from almost everybody. And again, this goes back to a really strong accounting background, and a managerial accounting background, the way that everybody prices today, the vast majority price, there's their price list. And they're pricing off what their competitors should do. And they'll either be a little bit above or a little bit below, but they want to be in that range. So that, you know, they know that they're competitive. That's a commoditization approach. And then essentially, when they begin to wake up, they're very first step. They're very first next step, step two, is making sure that their priceless compensates for their cost plus some desired profitability target. So what you're doing is you're raising your eye just a little bit and your nose just a little bit above the waterline. And this is why every month or every other month, or a little bit above a little bit below, seasonally, they may be up higher, and during the winter, they're going to be below it. The bottom line is they're right at the waterline. When you move yourself and understand where your cost structure is to recover your cost. That's fine. But that should be the absolute floor of where you want to be. What you want to do is establish the true value that you bring. Now you've got a negotiation gap in between. That's a whole different approach to creating and selling one value.

Marshall Atkinson  
Like what you hear so far, be sure to subscribe so you can get the latest from Success Stories. And now here's Devin free with the SNS spotlight.

Unknown Speaker  
Learning more about trends, eye catching decoration techniques, and unique apparel styles is the key to adding more value to your clients orders on our YouTube series decoration myths. We're teaching you all that and more by taking on challenging placements, products and misconceptions about decorating will show you that those hurdles are just opportunities to deliver something elevated and unique to your clients. So if you're having trouble on the press, or looking for some decoration inspiration, check out decoration myths on the S&S activewear. YouTube channel. Thanks for listening.

Marshall Atkinson  
Right. So you talked about earlier about there's uncertainty in the marketplace. And I totally agree with you. And one of the things I've heard you talk about before is that this is a fantastic opportunity for us to capitalize on what's going on. Can you elaborate on that a

Mark Coudray  
little bit? Yes. So just like coming out of COVID There's a lot of businesses that are hanging on by their fingernails. And as long as the business is moving, you know there's business coming through and the cash flow is flowing. They're working off what I call checkbook accounting. If there's money in the checkbook, then we can pay our bills. If there's no money in the checkbook, then we're going to have to wait. The first priority goes to payroll. And the second priority goes to your rent and your utilities and everybody after that's third in line. Now imagine this, if consumer confidence drops, which it is, and all of a sudden, they start pulling back saying, we need to stop spending, we need to hold off on this, the music slows, and the Musical Chairs of the cash flow, musical chairs stops. And if it stops, and you're short of cash, and you're working off of checkbook accounting, you're going to run out of cash, those guys are gonna go away. And we're going to have another redistribution in the marketplace with less people. So the people that are listening this today, if they're not doing profit, first, they need to get on it this week, today, don't delay, you need to be in control, you need to understand what's going on. And you need to have cash reserves. So making sure that you get paid up front, making sure that you're not spending beyond the minimum that you need to spend to stay in business. Don't make any big purchases in the near term, at least the next six months for sure to see what's going on to see how this settles out. If this market sub is slows down, your competitors that are weak are going to go out of business, you may still have an opportunity in the marketplace to continue. But it's going to be on terms cash terms, because inflation your money is worth less every single month you want to get that money upfront to preserve it. And if

Marshall Atkinson  
you haven't heard of it Profit First is the book by Mike McCalla wits, which is, is it just a fantastic book and mark you host a Profit First for screen printers Facebook group that always has lots of activity in it?

Mark Coudray  
Yeah, there's about almost 2000 people in that group now. So I'm really proud of that. And includes a whole bunch of Profit First certified professionals and Profit First masters. And they understand our industry. They're watching me as the prophet first master. And they're seeing how I'm applying it to an industry niche. And they're there to you know, to provide the services. I'm not a bookkeeper. If you need profit, first implementation, it's there and available for you.

Marshall Atkinson  
And just a quick shout out. Mark, was it last year, the year before you won an award, the number one profit first professional in any industry was you was that last year

Mark Coudray  
was 2019. I was a profit first professional of the year globally.

Marshall Atkinson  
So it's not like you don't know what's going on. Okay, so let's wrap up with something that I know that you probably can't wait to really get into. And I think it's super fascinating. And it's the whole notion of artificial intelligence. And you talked about this earlier, but I kind of want to really expand on this a little bit. And so while that might be great for a bank, or Netflix or something, and they're using artificial intelligence, I want to connect the dots more and how like the average decorated apparel shop owner might start thinking about this, and paying attention to it for what's coming down the pike for them using this idea.

Mark Coudray  
So the key thing, there's two components to AI, the front component is called machine learning. And machine learning is where we're training the model based on behavior. So the easiest way to think about it is, if I'm doing a halftone job, one node would be halftone. Job. And connecting that would be I need a screen screen is the other connection. And so what it does is it works with random data. So it can work off invoice data, it can work off of recorded transcripts, it can work off of video, it can work off of audio, it will work off podcast, and work off scrape data from magazine articles, whatever. And it applies. That goes through all of that. And it looks at the semantics of the wording. So when you see Siri on Apple devices, and Alexa on Amazon, all of that is using AI and every conversation that it's listening to. And as long as there's audio in the area where it is existing, it's recording it. So if you're at home watching a movie, it's recording the movie, if you're talking while you're watching the movie, it's recording you conversation along with the movie, and it's building this into the AI model. It's learning how we comprehend and how we behave. And you're right. It works really, really well for enterprise levels, but it doesn't work well for small areas like what we're doing. So to my knowledge, I'm the only one I'm in the small business space that's doing this, I haven't found anybody yet that I can talk to you that's not at the enterprise level, which is like the IBM, the Google, the Microsoft, the Amazon, to talk about doing this. And what I'm doing is with all of my activities, all of the sessions and things that I do, I record them and I transcript them, and I put them into the AI. And it builds a visual representation of what that conversation look like. And over time, I can see what happens to a small business, that becomes a million dollar business, that becomes a $3 million business, that becomes a 5 million and then 10 million, I can see how the conversations in the flow of behavior change over a large group of companies. And that's what I'm doing right now is I'm training the models. And I've been doing that for five years. I've got about 10 million data points in there right now, which sounds like a lot. But in relation to artificial intelligence, you need billions of data points. So typically, what I'm doing within my program catalyst, I'm now licensing additional coaches to create coaching programs based on the catalyst model, so that we can acquire the data and populate the AI model. So we get better prediction for small business. That's great.

Marshall Atkinson  
And so if I'm listening to this podcast, I'm going, Wow, that's remarkable. What can I do? Right, so should they be reading up? Should they be signing up for Catalyst? You know, what should they be doing? Mark,

Mark Coudray  
pay attention, pay attention to what's going on right now. Today, we're recording this on. What today, June 15. There is a huge, huge deal going on at Google right now. Google is firing all the AI ethicists, these are the people that are concerned about AI, doing bad things. And Google is firing on all of them. The top people that are that are raising the flag saying winning

Marshall Atkinson  
their thing was do no evil. That's what it

Mark Coudray  
used to be. Now. It's like, if you don't like it, there's the door. There's a really good article on Medium today that chronicles what's actually going on, pay attention to what's happening, pay attention to what's going on, what you want to be doing is looking into the future, because that's what AI is doing. It's helping you predict what's coming next. One of the key things I always talk about is think five steps ahead. And if you don't know how to think five steps ahead, that's, that's what I do is that's what I teach.

Marshall Atkinson  
And what's remarkable is that I don't know, it was years ago, you were talking about the market, shrinking down to the unit of one and predicting the print-on-demand. And that's where we are now. Right. So I think it's really remarkable that you're always looking and thinking and talking about things. And then it's like your crystal ball. Mark said this four years ago, and now here we are.

Mark Coudray  
So there's been a lot of interest recently about private equity, and venture capital investment in our industry and the effects on that. And I wrote a piece in 2014, about why venture capital has discovered the garment decorators. And that was based on information that took place in 2012. So what magazine was that? That was in screen printing magazine, and that was the swarm stat Award winner for the year, which was the most significant article for the year. And that was 2014. That was eight years ago. And people like well, why are you talking about this? Well, now we know.

Marshall Atkinson  
Alec is Zam. Here we are. All right, well, great. Well, hey, Mark, thank you so much for sharing your story of success with us today and all of your ideas. If someone wants to learn more about what you do, or maybe how you can help them, what is the best way to contact you,

Mark Coudray  
there's a couple of ways you can email me directly at coudray@coudray.com. You can connect with me on LinkedIn at Mark Coudray. And I'm the only mark Coudray on the entire LinkedIn network. So it shouldn't be hard there. If you want to find out more about Catalyst and Catalyst Plan, you can go to catalyst plan.com and set up a call or you know, download some things that we'll be putting up there soon.

Marshall Atkinson  
Awesome. Well, thank you so much for your time today. It was awesome. As always, I appreciate you. Well, thank

Mark Coudray  
you, Marshall. And I'd like to wrap up with just one thought is that, you know, we are coming into a period of uncertainty. But that doesn't mean that it's bad. It really just means that we need to pay attention. And there's a lot going on. And that's exciting. And so if you look at it with the standpoint that there is opportunity in the chaos, everything will be great.

Marshall Atkinson  
Well, there's blood in the streets by right. All right. Thanks, Mark. All right. Well, that's our show today. Thanks for listening. And don't forget to subscribe so you can stay up to date on the latest Success Stories episodes. have any suggestions for future guests or topics? send them my way and marshall@marshallatkinson.com and we'll see you next time.

Transcribed by https://otter.ai