How Yeti Coolers became a Billion Dollar Empire
If you went back in time 15 years and tried to find someone wiling to pay $400 for a cooler, you would likely get laughed back to current times. When $30 coolers flooded the market it was tough to imagine the possibility of a cooler becoming a luxury product. However, things have changed. That’s thanks to two outdoors-loving brothers from southwestern Texas, Roy and Ryan Seiders. Let's explore how nearly every aspect of their lives contributed to the stars aligning perfectly; Allowing them to build Yeti Coolers into the billion-dollar empire they’re known as today.
Roger Seiders - The Father of Yeti Coolers
Ryan and Roy Seiders are listed as the official founders of Yeti Coolers but the origin can be traced back to their dad, Roger Seiders. He had a knack for finding solutions to his problems even if those solutions didn't exist yet. A trait that he successfully passed down to his sons.
He worked as a middle school shop teacher in the mid 1970s, teaching students how to work well with their hands. However, he was unable to resist mixing in his love for the outdoors and fishing. His student's semester project was to build a custom fishing rod which is something he also enjoyed doing in his free time. As the years passed and the rods aged, he noticed a recurring problem; The clear coat used on the rods would crack when the rod was bent.
He went to a manufacturer and worked with them to develop an epoxy that was flexible enough to endure a drawn out fishing battle. The only condition, he would have to buy 100 gallons. After stocking the classroom cabinets, he packed the rest in 2 oz. containers and put them up for sale in the local sporting goods store under the name Flex Coat. It wasn’t meant to be anything more than a solution to his problem but when he went back the next evening, it had already sold out. The salesman convinced him to bring it to a tradeshow where he discovered large fishing rod companies having the same problem. As he wrote $80,000 orders, his $20,000 salary started shrinking in importance. It wasn’t long before he quit his teaching job to focus on Flex Coat and relocated to Driftwood, Texas in the late 1970s.
Roger had two sons around the same time. Ryan and Roy were born 4 years apart in 1973 and 1977. As they grew up, their father’s sudden turn to entrepreneurship exposed them more and more to the ins and outs of small business. They traveled with him to trade shows, talked to people about their dad's product, listened to customer service calls, and helped create catalogues. The seeds of entrepreneurship were planted into Ryan and Roy nearly every day of their upbringing. A priceless education that the brothers would soon put to good use.
The Origin of Yeti Coolers
It’s no surprise that neither Ryan nor Roy were interested in getting an ordinary job after they graduated from college. Ryan finished school in 1997 and Roy in 2000. They didn’t know what they wanted their lifelong pursuit to be. Ryan started paving his own path and launched Waterloo Rods to pursue his dream of starting a name brand fishing rod company. By following the small business playbook he was taught throughout his upbringing, he was able to build it into a respected rod company that was increasingly popular in the southern United States. After eight years he got a call from one of his loyal customers who asked a question that surprised him, “How much are you willing to sell the company for?". Ryan hesitated before he said a number and couldn’t believe what he heard back. “Sold.” That left him with one question, now what?
Meanwhile, Roy was experimenting with his own entrepreneurial ventures by selling foldable shooting benches and custom boats. There was always one part of his boats that he wasn’t ecstatic with; the cooler. An important part of every boat, used for keeping fish fresh, drinks cold, as bench seats, and as casting platforms. However, the handles would snap, lids would cave in, and quality would diminish when it was exposed to poor weather. He started modifying coolers by putting plywood on top and sprinkling it with sand for grip. It’s said the origin of Yeti can be traced back to this very moment; It would just take a little longer to put the pieces together.
Roy’s cooler issues eased a bit after Ryan showed him a rotomolded cooler he’d seen at a tradeshow when he was building Waterloo Rods. Rotomolding created a one piece, durable plastic shell that could then be filled with insulation. After using the new coolers for a while, Roy became a distributor for the company. He slowly transitioned from a custom boat maker to a cooler salesman. But there was still one problem; they weren’t perfect. Roy lost sleep thinking of all the ways it could be done better.
It was then, in 2006, that Roy decided he would do it himself. And it happened to be at the same time Ryan stumbled into selling Waterloo Rods.
The Founding of Yeti Coolers
The two brothers set off together to build their ultimate cooler that was based less on surveys and market data and more on the cooler they personally would use every day if it existed. The first two years were a constant hustle. A time they spent traveling to every trade show imaginable trying to convert people from the average $30 cooler to the $400 Yeti. As predicted, most people said no. Though it wasn’t until 2008 that they had the ability to work with manufacturers to design their dream cooler from the ground up; Heavy-duty, rubber latches, sealed lid system, military-grade rope handles, tie-down slots, drain slots, unbreakable hinges, and non-slip padding on the bottom.
The Yeti Tundra was born.
Pioneering a New Cooler Market
In 2008, Yeti began to skyrocket in popularity. They started working with retailers including Bass Pro and Cabela’s and it marked the start of its evolution from the luxury fishing market to the general public. You’re probably used to seeing them used now on the golf course, at tailgates, by the pool, or at the beach. They’ve managed to transform the seemingly boring cooler market into an inspirational lifestyle brand. While this wasn’t by accident, it also didn’t come naturally to Ryan or Roy. The brand itself was crafted by a man named Walt Larsen; The founder of an advertising agency called scales. He confronted the Seiders at a trade show after Yeti was the only brand that caught his eye. Larsen had a long track record of positioning products, specifically in the bow hunting industry, as luxurious and top of the line. Ryan and Roy agreed to work with him and it’s the interaction that turned Yeti into what it is today. Larsen took everything the Seiders knew was great about a Yeti cooler and turned it into a digestible story. He started crafting everything to embody a brand made for those that are passionate about adventure and respect high quality product craftsmanship. He changed the photos and videos used in advertising, positioned celebrities alongside the coolers, and even managed to get a bear to wrestle with a Yeti, earning it a certification for bear resistance. Most importantly, Larsen broke down the Yeti brand into one, easily digestible slogan - Wildly Stronger! Keep Ice Longer!
The result of their consistent efforts to position Yeti as a product that was made better, performed better, and used by those that are better, was the ability to sell them for significantly more than their competitors. They now offer coolers as expensive as $1,300.
Yeti would agree that the community they’ve built around their products is a differentiator. The company cited in their SEC paperwork that being an influential, growing brand, with a passionate following is their top advantage over their competitors. Adding that 95% of their customers have recommended Yeti to others through word of mouth or social media. It’s what most businesses spend their entire marketing efforts trying to achieve and usually never do.
Yeti's Explosive Growth
The growth of Yeti has been insane. That can be seen clearly by their net sales which grew from $89.9 million in 2013 to $639.2 million in 2017. In 2012, they sold majority ownership of Yeti to Cortec Group, a private equity firm. While the specifics of the deal weren’t made public, it was said at the time that Cortec Group was investing in companies valued from $30 million to $300 million. Cortec has led the company through a massive expansion of product offerings but the original marketing strategy remains largely intact. In 2018, Yeti filed for an initial public offering and is now publicly traded on the New York Stock Exchange. Their market cap now sits at more than eight billion dollars.
What started as a mere idea in Driftwood, Texas, is now a recognized brand in most of the U.S. and other countries around the world. It’s easy to look at Yeti Coolers and think it must have been created by someone that’s different from you and I. However, it was actually just two ordinary brothers who paid close attention to the problems they faced in their lives and didn’t give up on their chase to make an impact.