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Business of Home Podcast
How Fireclay Tile's CEO learned to plan for success
00:50:58
Eric Edelson, CEO of the fast-growing Bay Area tile brand, shares lessons learned from a busy period in his company's history.
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This is Business of Home.
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I'm your host, Dennis Scully. Every week I'll be speaking with leaders and innovators from all corners of the home industry. My guest this week is Eric Edelson, the CEO of Fire Clay Tile. The last time Eric was on the podcast, he shared the story of how he took over the company and in a Jerry Maguire like moment, turned its business model upside down. Six years later and Fire Clay has grown considerably and Eric has been on an acquisition spree, recently picking up Fox Marble, a sizable Bay Area fabrication and installation firm. I spoke with Eric about why running a company in California is both an opportunity and a challenge, why he still believes in the B Corp. Model, and why the biggest change to his approach has been learning how to plan for success.
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Foreign.
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A
Now, before we dive into some of the new challenges you've brought upon yourself and the hundreds of employees that you're carrying on your sinewy shoulders, let's catch people up on a little bit of the history of fire clay tile and what it's all about. Because it is a remarkable story, what you've built over the years.
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C
Yeah, we're deeply proud of it. So Fire clay actually turns 40 years old this year. The company started in 1986 in San Jose, California by a gentleman named Paul Burns. His tile roots ran deep. His uncle had a tile factory in San Jose going back to the 1950s called Stone Lake Tile, and Paul got together With a few friends, started fire Clay for say, the next 24 years or so. It was a small ceramic studio that served high end tile stores around the country. I happened to meet him through one of my friend's fathers in 2009, actually 2008. I had just finished business school and was looking for kind of an adventure, Something entrepreneurial. I didn't necessarily want to go work in a large traditional organization which at the time where I was living were companies like Google and Facebook. Turns out those did pretty well.
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A
Yeah, I'm so glad you didn't go work for one of them.
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C
Oh, exactly. Heaven forbid. But no, I just always, always had. I started my career investing in early stage healthcare companies. Frigate was just always. I always wanted to be on the other side of the table. Always wanted to operate and run a business. And I met Paul, just kind of on a whim, decided to shake hands with him. We struck a kind of an agreement that I would kind of come in and help. There was no job title, There was no list of responsibilities. It was just do. The joke is that my wife had given me five years at fire clay because we had just had our first kid. I was commuting an hour and a half each way. I was really making no money. And so I was desperate. And I had this epiphany that we had a good business. We just had a bad business model and woke up in the middle of the night in February of 2013, realized that we were never going to have success selling tile wholesale. We need to go direct. We need to become a brand. I was inspired by companies like the shade store at the time and decided just, you know, let's do it. And decided to basically get out of wholesale to kind of quote unquote, fire our customers. So somewhat throw the hail Mary pass. Raised a little bit of capital from friends and family, and January 6, 2014, relaunched Fireclay to be a direct, vertically integrated brand. And that basically set us off on this journey to really transform fireclay to grow it. We hit every single challenge one could imagine trying to not just scale a design brand, but also scale a manufacturing company to do it in California. We became a certified benefit corporation, as I believe a lot in social responsibility and you know, fast forward to today. Today, Fire clay were just about 420 teammates throughout the United States and abroad. Today we have three manufacturing facilities. We have. We're going on 10 showrooms. We've stayed very true to the original founding story of fire clay, which is beautiful craftsman manufactured products made domestically here in The United States. And we're doing that in ceramic tile, we're doing that in glass tile, we're doing that in glazed thin brick, beautiful hand painted tile mosaics, custom colors, custom designs. And most recently, we have gone into the services side of the business through several acquisitions in the tile installation space and are now doing stone fabrication, stone care and maintenance through the acquisition of a company here in the Bay Area called Fox Marble. So the business has really very much evolved and grown, but really stayed very true to the roots of fire clay in a modern way, using technology.
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A
Well, tell me a little bit more about that. So using technology and doing it in a modern way, what does that mean in this context?
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C
So one of the disadvantages of Fireclay is that we're based in California. So you look at any, you hit any CEO survey, they say California is the worst state to do business in.
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A
The most challenging state, perhaps. Right? It's a beautiful state. It's really incredible, and it feeds so much of the nation, but also a really challenging place to run a manufacturing operation.
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C
Absolutely, absolutely. If you're not high tech, raising gobbles of venture capital, buddy, can be hard. But. But I would say that on the flip side, the spirit of innovation, the spirit of entrepreneurship has really, I think, pushed us. And we have a location that's in downtown San Francisco, right in the SOMA district. We are caddy corner to Airbnb, across the street from Adobe. And so I think that spirit of customer fascination, customer obsession using technology has really been front and center. The first thing I did at Firefly back in 2009 was implement Salesforce was redesign our website. And so one of the themes that I see in the, in the services space, specifically tile installation and stone fabrication, is there's also that same opportunity for technology and technology advancement to make those services more exciting, more experiential for our clients. So, yeah, I mean, I've just become such a fan of technology, and Fireclay has been a really fun platform to embrace technology across all facets of the organization.
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A
And has AI become a meaningful component of that technological embrace that you describe?
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C
We're on our way. So I think that when I first used ChatGPT or these tools back in 2000, what, 23. I mean, I was profoundly struck. And I thought it was so compelling that we launched a CEU for the design industry on, on training designers and architects on how to use ChatGPT. We trained over 2000 or trade clients on how to use these tools. And I think if you came here, you'd find almost every person here is using AI in some way in their work, whether it's through custom gems to help them craft better emails, or to negotiate better with vendors, or to find more opportunities for conversion for our sales team or better coaching. You're going to find it on the factory floor, you're going to find it in our technology team. I think where we are today is that we're not at that next phase, what we'll call the agentic phase. So we haven't necessarily found ways that AI can start supporting our team with taking over processes or starting to handle repetitive types of work. But I think we're going to get there. I will say that on the technology side, the engineering side, we're getting extreme benefits. I mean, we are moving so much faster with building tools. We just went live on Shopify. A typical migration for a website might be six to nine months. We did it in three. The power that we're getting in terms of data insights, reporting is just exceptional. And the tools that we're able to build, not necessarily externally, but internally for our sales team, for our manufacturing teams, have been really exciting to see. So I think that's a big opportunity for us over this next year.
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But clearly it sounds like the data mining part of it has been a
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huge value for you.
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C
Yeah, absolutely. I think that almost every day with Claude now especially, I'm just dumbfounded at what we're able to do. So today's example, or, sorry, yesterday's example, I'd say For the last 10 years, every morning I open up my email, I have kind of this email summary from Salesforce of every transaction from yesterday. So every book order, every quote that was sent out and every sample and it's just, you know, it could be 3, 4, 500 lines of information for all the different, you know, salespeople, customers. And I kind of go through it and I click on things to see what's in there. And I sent an email to our engineer team and said, hey, you know, it would just be. I kind of want to like get the daily news summary, like almost like a here's what yesterday's news was. And, and Dave, our VP of technology is like, no problem. Cloud can do that because we have, through mcps we got Salesforce feeding in and a lot of our data models sit on Snowflake. And, and so today I woke up with this, you know, beautiful branded summary of, of yesterday. You know, where samples came from, what salespeople, you know, closed orders, who are most, you know, what clients purchase from Us and what products they were ordering from us. And it was just so pretty. And so that was amazing. And he probably spent five minutes on it. So I think those ways of how we're starting to really take information and data and bring it to life in a way that's starting to be really understandable. We're able to create, for example, sales workbooks. We have about 60, 70 sales professionals. Caitlin, our VP of sales, she's now creating individualized sales workbooks for every teammate. That is not just kind of telling them, like, oh, this is how you sold. It's really giving them insight into how they're doing, how they're doing against their plan, where they have opportunities for improved conversion, either on the homeowner side or the trade side, what products they're selling successfully, what services we offer that maybe they have an opportunity to do more with, because we see better engagement when we offer those services. So those are just the great examples where you're really taking the information and feeding it back to people in a way they can actually start to understand and make sense of it, and where we can actually, again, use these tools as partners for them to help them have more success. So those are some of the great examples where data is very much coming to life. But, yeah, now think that instead of what I've had for the last 10 years, which is this, just lots of lines of orders that I have to sift through and start to figure out, I can actually just get this beautiful branded. Yesterday's recap. Like, that's cool. That's awesome.
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I want to come back and talk
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about this notion of you sort of looking at Shade Store as a great model, because it seems like you're moving closer and closer to that model with some of your recent acquisitions and how you're thinking about them. So let's talk about it, because now it's gone beyond the tiles themselves.
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C
I mean, I think every entrepreneur has, you know, we. We want to solve problems. And I think that any great person will tell you, you know, find a problem to solve. And, you know, usually that means there's an opportunity. And so I just saw so much customer pain, so much frustration. I mean, this industry has so much product coming from so many different places, and what I just consistently see is a lack of experience. I see a lack of customer obsession. You know, it's. It's just this. This product kind of thing. And I think for fireglade was always, okay, there's a lot of product out there. How do we take the experience to the next level. And so back in 2013, I just kept looking at the dealer model and saying, is this really the best customer experience? To walk into a showroom and see 90 different vendors, every single product under the sun. You don't know where that product comes from, how it was made, who made it, when you're going to get it, how it's priced. And we just saw so many designers and architects wanting to work with the maker, but it was so challenging because these makers were not set up for it. So I think that was kind of the first problem that I saw that kind of our shift to, you know, being a pure manufacturer, selling to retailers, you know, to go vertical. And ended up acquiring a small business in the Bay Area called Heritage Marble and Tiles. And it started us on this journey of trying to figure out how we could have an impact in tile installation. You know, we made a lot of mistakes along the way. I had this ridiculous idea that we would only install fire clay and that only, you know, people would only buy fire clay. That didn't quite work out. I had this, you know, vision that we would, you know, take this to our other showrooms down in LA and elsewhere tried that. That didn't quite work out. You know, so, you know, plenty of failures but, but, you know, just kept, kept hammering and improving technology, improving, starting to think about how we train people, how we bring technology to, to the forefront, how we sell it. And that led me to realizing, okay, this is really cool, but right now this is pretty small. We got up to about 17 people. It was taking up a lot of my time. And so it was either are we going to do something here? And if so, we needed to kind of take a major leap or not. And so that's when the Fox Marvel opportunity presented itself. And Fox Marvel also is 40 years old, started in 1986 by a wonderful gentleman named Charlie McLaughlin. And we were able to strike a deal last fall for us to acquire it. We closed on that acquisition on February 2nd and that really allowed us to kind of almost 10x the opportunity. We went from about 15 people people to about 130 people. But Fox suffered from a lot of things that I saw when I first got to Fireclay. It was a little bit outdated in terms of technology. I think some of the opportunities on just the organization leadership were there. And so it created a wonderful opportunity for not just myself, but for the entire Fireclay team to really step in and add tremendous value. So I'm now currently running both companies. That gets me really excited for this Next phase. I mean, I tend to think about things in ten year visions of like, what is the next decade going to look like? And I think we have an amazing opportunity to create an example installation and services company that, you know, I hope, I hope we can train others, I hope we can inspire others because I think what we see in the tile and solar side is, you know, many people leaving the field. We also, we have a giant immigration issue where so much of our labor comes from. But we see a lot of the master craftsmen, you know, aging out. They haven't done a great job with succession. They don't have someone to take over. And we don't want that skill to get lost. So, you know, we're, we're focusing on training, focusing on technology, we're focusing on communication and process and I think we can have a huge impact. So we're doing that in the Bay Area right now and maybe we'll expand, you know, from there. But right now, you know, very, very focused geographically on the Bay Area.
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We're told today that part of the reason that you want to become a tile installer or a furniture maker or an upholsterer is that your profession is not going to be eliminated by AI. You're going to be safe, right, because you're going to be doing something that no computer program or app on your phone is ever going to be able to do. And joking aside about that, when we think about how do we get people excited about getting back into getting trained in this profession? I mean, is that a helpful notion for people? That this seems like it has a long term career tied to it, that yes, this can be a future for someone?
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I mean, I believe so. I mean, not everyone wants to sit behind a desk all day typing away and talking to their AI. A lot of people want to be out in the environment, in a variety
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of spaces, installing waterproofing, cutting tiles?
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C
Yes, absolutely. I don't think that the traditional education path, I mean, it worked for me and I would never take it back, but I just, I don't think that necessarily works for others. And again, you know, with, with Kind of. I mean, you look at almost anything, you know, the average age of a home in the United States, what we need to do to continue to build, to support our population, just general maintenance. I mean, you take a design in this industry, again, so many designers, so much product, so many projects that people want to do, but it's the access to labor that is the hardest thing always to find. And yes, you can go build a new porcelain facility in Tennessee and churn out, you know, millions of square foot of tile, but someone's got to install it and, and maybe at some point, you know, Elon's robots will be there to do it. And in some ways I hope that happens because like I said, I think we're going to need it. But I think, yeah, like there's, there's tons of great, you know, blue collar jobs out there, and, and I think these are great places for people to earn a great living, have career advancement, have a, have a subject matter expertise that they have, you know, forever. So, yeah, I'm very bullish on that. Absolutely. And I think that, you know, to, to give credit to certain places in home, we've seen, you know, huge improvement in H vac, electrical, roofing, and those are very, very competitive industries right now. Private equity has taken a foothold, but they're not construction. They're much easier. They're, they're not a live work site. They're, they're, they can be done very independently. These professions where we're talking remodeling, when you're in someone's home where you're doing something interior, that relies on other trades, that relies on general contractors, that has a design element, it's a completely different ball game. It's far more complicated, which is why you actually don't see a lot of private equity in here unless it's at the, the kind of lower end of the market. And we need it, and we have to stay competitive or else all these ber craftsmen that, that would come into our industry will go elsewhere. So I think we got to get these people a great home, a great experience, because otherwise they'll be pulled into another industry and we're going to need this in the design world.
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A
Well, it is really complicated, Eric. And to your point about private equity, do you worry that private equity looked at this and said, no, it's too darn complicated, it's too darn hard. But no, you decided to step in and say, not for me, not for me, not after what I've built at Fire Clay.
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B
Go ahead.
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Did you Talk to anyone about this? Did anyone try to dissuade you from this? Eric, Go ahead, you can tell me.
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C
So, Fire Clay, we've needed capital to grow. This is a high capex business. And I always joke that I've had to beg, borrow, I wouldn't say steal, but plead on hands and knees for capital for the entire 18 years I've been here. And we have great lenders, we have great investors. And so our primary investor is a group called Provenance Growth and a gentleman named Anthony Cho. And Anthony, the first time I called him to tell me about this, his first comment was, eric, don't you think you already have a complicated enough business,
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my man? There you go. Yes. And you're going.
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B
Well, is it though complicated, really?
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C
And Fireclay is very complex. There is no doubt about that. So he's not wrong. And at the same time, I think that where Fireclay has always excelled is really in the complex. And I've been really fortunate to have partnered with an incredible group of teammates here who just care deeply and are incredibly passionate and hardworking. And I always tell them, you know, hey, you know, we want to, we want to manufacture our products, we want to do it the right way, want to give ownership to our teammates, we want to be a certified B corp, we want to care about the environment, we want to do this all domestically. It just means we got to work harder. That's just the mantra internally. We just got to outwork other people because we do take the harder approach. And I think that another approach might be, oh, you know, we'll just, we'll just outsource this, we'll create, you know, a network of installers. But I think to do it the right way, yeah, we got to kind of own it, we got to run it, got to take responsibility for it. And I think that the bet I'm taking is that we've got a very strong team at Fire Clay, where I can spend a good portion of my time on Fox and pull some of those teammates in as needed to support and that the Fireclay business will continue to thrive. And to me, it just creates opportunities for other people on this team to step up, take more accountability, take more responsibility. No different than what I had when I came in here. And what we're seeing is we're seeing a ton of growth happening at Fireclay right now for so many reasons. We're keep attracting tremendous talent. And part of, I think our long term thesis is this is our sixth acquisition. I, I'd like to do more over time. And, and so building that muscle, building that acumen, building that competency. Because I think there's a lot of owners out there who, who frankly don't want to sell to private equity and, and to be a strategic acquirer for beautiful craftsman oriented products. I think Firecle could be that partner to people. So I think in long term vision, I've been here for 18 years, I hope to be here another 18 years. I'm having so much fun and, and I hope to have a wide variety of products and capabilities that, that we can offer the trade. Because I think that, I think the trade wants beautiful crafted products. I think if they had their choice, they would turn to domestic sources. They want things that they can depend on, where they can call and get customer service right away, where if there's an issue, it'll get sorted, where the lead times can be tight and fast. And I think we can offer that. But yeah, we're out there on this one. But sometimes I say if not us, then whom. And having gone to a lot of these tile shows and talked to a lot of customers, there's a lot of worry about the future of professionals in this space. And on the fireplace side, there's so much product now there's just so much tile product.
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And why is that?
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Why do people think it's so easy to step in and make tile? And what is it about this industry that seems like it has such a low barrier to entry?
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C
I don't know. Because it's not even a very big market. It's not a very big market. At the high end it's even smaller. But yeah, we see new entrants all the time. With Shopify and AI it's never been easier to start a website and we see that. And it's actually quite easy to look quite nice right now. And there's many manufacturers, mostly outside the United States because truly we only get 20, 25% of our product domestically that are just can't wait to offer their products pretty expensively to people. So yeah, I don't know. I think some of it goes back to. I meet so many people who I think have just a love for ceramics. I think some of it comes back to that. Being a kid playing with clay, playing in the dirt. There's something about it. You meet so many people who are taking pottery and spinning and throwing bowls and throwing plates. So I think people have a love for it. And when you go back in history, right, I mean tile and ceramics, it's basically been a core part of the human experience. So it's not lost to me when people get excited about it. But it is a tough market and there's a lot of product out there. And Fireclay, we're taking shots on both expanding our product offering, and we've launched more product in the last year than I think we had launched the five years previously. We just entered the bath category. So you're seeing us again, be more diversified with our own products and starting to kind of layer in some additional product categories that I think lend themselves well to our customer. But I think kind of again, going into other services categories, potentially in the future, getting into other product categories will be part of our growth story. But you're always going to have this element of the craftsman side, that domestic manufacturing experience side that I think really sets fire clay apart from anyone else.
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A
Talk to me more about the bath side. And I've seen that great product, and it's beautiful. But again, not an empty playing field. The bath space, I've heard there are some pretty big players in that space already. I used to work for one of them. But I mean, what I'm wondering is, did it make sense? Because it just seemed like such a natural extension of the tile and the people that were already coming to you for that, or how did you think about that and what made it appealing?
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C
About a decade ago, I had met Avi Abel, who used to lead Watermark designs in Brooklyn. And Avi and I became good buddies, and he had built a really successful business with his father that he successfully sold through his partnership. We designed and developed a bath collection. He had always had this love and desire to do something with ceramics in bath. And so we were able to bring our ceramic expertise to that, which is where we launched our beautiful ceramic candles. You know, it just. It just made a lot of sense. And I think we were also sitting here saying, gosh, I think we might have picked the most difficult category, which is beautiful custom tile. What if we try some other categories that, you know, maybe both a little bit larger in market size and potentially even, you know, easier to sell in some ways, just from a. From a kind of a technical competency. And so our sales team, we spent a lot of time training them and it's been great. We launched it in November, and so far, so good.
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B
We're taking a quick break to remind you about Ernesta. Beautiful interiors. Start with the right foundation, and with Ernesta, you get custom sized rugs made to fit down to the very inch, cut to the exact dimensions you need. Ernesta has solutions for every project from stair runners to corner shapes and and fireplace cutouts offering full service installation and on site fittings. Ernesta's custom services are now available at a showroom near you. To learn more and join Ernesta's trade program, visit ernesta.com boh that's ernesta.com boh and now back to the show.
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A
And in terms of getting a read on how all of this is working, is it, is it challenging for you with, with the housing market being as frozen as it has been for the last several years, is it, is it hard to really get a sense of what the true potential or the opportunity is? Because houses, I mean, no matter where you look, they're just not turning over in a meaningful way. Way.
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C
It's definitely been a few hard years for sure, but it just means that, you know, everyone's facing the same challenges and again, what does it mean for us? How do we differentiate? So I think that all of those moments have been moments for us to lean in and go deeper on how we can improve. I often tell our team this. You know, you have to, you have to put yourself in the shoes of a homeowner, a building owner, an ice cream shop owner, a restaurant owner, a designer. I mean, these projects, if you were to actually model them out, I mean, they have thousands of decisions relying on hundreds of suppliers with many service providers. And so when you kind of do the math in terms of how many things have to go right to try to hit your project on time, on budget, it's no wonder that every project runs over and costs more because the impossibility of perfection is real. And so, you know, we have to be, we have to really understand that journey that a client's going through and just try to make it as easy as possible for them. And when things go wrong, which inevitably they do, how can we make it right? And I do think that our business is really set up to take care of folks, to be able to kind of be there to support them when things go wrong. Yeah. So I think, you know, if anything, the last few years has taught us, you know, there's always going to be great opportunities for greedy experiences. And from what we're seeing, based on our growth, we're seeing a lot of success in that.
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A
So it's more trying to take market share perhaps away from others during a challenging time.
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C
I think the tile, no, I think the tile market is down 25%.
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A
What tells you that the market's down 25% for tile? I mean, where do you get that information?
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C
Oh, I get that. We're members of the Tile Council of North America. So every month I get a little scoreboard of imports and exports and where the tile industry is. Yeah, it's just down. I mean, I think you see the same thing in architectural billings. All the data is. Is down. But, you know, I think it's. What's funny is, like, tile markets down, competition is up, number of products is up. So I think for us, it's really just, you know, how do we win one client at a time. This business was built on. We were not built on performance marketing. We were built on, you know, just great customer experience, you know, trade, repeat business referral, word of mouth. We're now getting more into that game of performance marketing. I think you have to in order to be competitive. And that's where, frankly, you've seen a lot of the competition go. So I think the fun part for us is we're actually starting to build that muscle that I think a lot of our competition been building for years, and we're getting really good at it.
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A
Well, so tell me more about that. So what are you doing and what are you learning from that?
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C
Well, I'd say that the story of Fireclay for the teens was we had no capacity. I mean, we grew from 2014 to 2020, but, I mean, we're just always out of capacity. And it was. It was brutal. We were always behind. We're always late. So 2020 came. We. We knew we were going to need growth. We started to invest massively in our California facility. In 2022, an opportunity came up to acquire a facility in Spokane, Washington. And so all of a sudden, 2023, we are sitting on gargantuan amounts of capacity, six times the capacity. We deployed about $35 million in manufacturing expansion. So today we have over 200,000 square feet under roof. But we didn't have the growth. We had not made the investments in growth to complement the capacity we were building because it had just come to us and we just couldn't fulfill it. And all of a sudden, you had this moment where the growth wasn't there, the market was constrained. And so we really start thinking about growth. That's when we started our showroom expansion. We're now up to about, I think, nine showrooms. I think we'll be at about 11 by the end of the year. And we need to really think about the digital side. So we brought in a great new digital team this fall that predicated the Shopify transition. And, yeah, we're starting to kind of put meaningful dollars to work on paid search and social and other areas, which is just a competency and a skill set that frankly we didn't have historically. So it's been a lot of fun. We're leaning much deeper into the digital and the website and yeah, so far so good. I mean, we're a couple months into this and really very excited about the team that we brought in and what
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A
is turning out to be the most beneficial or rewarding place to allocate resources.
- [33:56]
C
There's. Yeah, I mean, I'd say right now it's nothing complex. I mean, we're really leaning on the Google mothership, we're leaning on Meta and Pinterest. And I'd say we're early in our journey, but basically I'd say doing a lot of low hanging fruit. So the next phase will be getting more into direct mail, getting more into how we can kind of take partner with a lot of our incredible designers to inspire them to talk more about fire clay. But right now I'd say it's a lot of traditional paid search, working internally, working with some external partners and I'd say just kind of playing the game that some of our competition has been playing to. Yeah, I'd say just be a little bit more competitive with them. And it's great because we know that between the products that we sell and sample and what our sales team can do to drive incredible success and then some of these complementary services like design services and customization, we know it works. So we're playing that game. We're just directing a lot more capital to it. But we're really starting to see the return, which is exciting.
- [35:01]
A
And is your team talking to you about how to show up in ChatGPT and Claude in a much more meaningful way? Because everyone's trying to figure that out right now, right?
- [35:12]
C
I'd say yes. And I think we also still have some time there. I mean, I think that you have to do the low hanging fruit. Right? I mean, so, you know, making sure we have great reviews, making sure that people are speaking about us successfully online, making sure that we're doing a good job on social, making sure that our website is set up for success and we've got a lot of great information there that that is catering to these tools. But you know, it's, it's no different than the 2000s where it was all about SEO. And you know, we just, we're just going to have to like constantly work, work, work, do the basics right. So I think we could always be better. But yeah, kind of making sure that we're showing up at those places will be important. But I don't know if any of us can really determine how that's going to happen or what's moving the needle. I think a lot of it comes back to basics. I mean one of the things that we've leaned into in the last year is pr. We work with a great firm, the consultancy PR and Lauren and her team and they've done just a phenomenal job supporting us. I think this year we're almost getting a press mention every day. And so I think those types of authentic shout outs praises really are kind of where those tools will lean. So it's always going to shift. But it's all about kind of having the right team inside and trying to move the needle. But going back, I think again we have the capacity, we have the technology, we have this incredible reputation, a great brand that's a certified B corp where we give ownership to our employees, where we care about the environment, where we're transparent in almost every single thing that we do. That's really fun. It's not lost on me the incredible business that we've built here. And I still wake up every single day just really excited and challenged on how we can make it better for our team to make our client experience better.
- [36:56]
A
So let's talk about being a B corp because. Right, because I know that is a passion of yours and I'm curious your perception of how much the whole B corp movement, I don't want to say got sidetracked, but there were definitely some bumps in the road and there were some companies that were called into question, some of their qualifications. Right. And it sounds like the B Corporation itself sort of went back and kind of looked at itself internally and said what do we need to change? What do we need to fix here? I mean, tell me how it's going for you.
- [37:30]
C
I mean I think that at its heart the founders of B Lab, they started this organization in 2000, I think 2007, 2008. And I think the premise was really pure. It was hey, it's not just nonprofit good for profit, bad. And when you think about that, it's a really broad spectrum. I mean there's so many different industries that for profits of businesses exist in so many different geographic categories, business size. So it's pretty incredible undertaking to say hey we can create a certifying body that go look at any of these for profit companies and determine know if they're doing good. I think that you know, the organization itself has definitely taken, you know, turns. You know, a lot of the founding team members are no longer there. But I still think that the premise that there is, you know, a body that is sitting here and saying, hey, you know, if you're a for profit company and you want to be, you know, you really want to differentiate along the lines of good and what social impact and social responsibility means or environmental stewardship or community engagement, or frankly, just the most important one, taking care of your people. You know, we are here for you and we'll put you through a really arduous process where you'll go through a really complicated questionnaire, it'll be audited, you'll be questioned to determine, you know, are you actually doing what you say you're going to do. I think that has merit because on the other side it's a free for all and there is no accountability. And if you look at most of our competition, I mean, heck, there's no transparency. You don't know anything about their product, where it came from, how it was made. You know, nothing about what they're doing for the environment. You know, next to nothing about what they're doing for the community outside of, you know, they put something on a website that's like, we support this organization, but that could be $10, it could be $10,000, you know, no idea. And so that's not good either. And so I think there's real merit there. And I think what it's done for me as a leader at Fireclay is certainly held me accountable. Doesn't mean that we're always doing the perfect thing for our employees or for the environment or for the community. But I think net net, we're going to be over and above many others. And when I look at ourselves against the industry, it's hard to kind of compare how we operate versus how most of the rest. And now not going to say all because there's a few that I respect but for really 95% of them, you know, they're taking shortcuts every which way and it's really just about, you know, selling stuff to people. And that's, that's not how we operate. For us it's, it's much more about a stakeholder philosophy. It's about making sure we have an incredible place where our employees can have success. It's making sure that we take care of the environment, that we are structured with our community giving and that we share the love. So far, clay is still 25, 30% owned by our Teammates. And, you know, I think things like that are. Are very difficult to do, but. But really important in the grand scheme of things.
- [40:19]
A
I'm curious your perception of how helpful it is to have that component of your story as you're out there sharing
- [40:28]
B
the story of Fire Clay.
- [40:30]
C
Yeah, not very, to be honest.
- [40:33]
A
Sadly, it doesn't resonate with a lot of people in the way that we wish it would.
- [40:37]
C
No, I mean, if you take. I mean, I ask designers this all the time. Hey, you have two tiles. They're slightly different shades of green. One is from Fire Clay. You know, you know, everything about us, you know, everything about the product, all the environmental elements. And another is from, you know, some random Shopify website. No idea where it came from, which she pick. And she says, well, it depends what color is better for the product. Right, right. And so, you know, it still comes down to, you know, color and aesthetic and price and availability. So. But for myself, for the team here, for how we operate this business, I mean, again, since the last time we spoke, Dennis, you know, we've grown four times.
- [41:09]
B
Yeah.
- [41:09]
C
And I think during my time at Fire Clay, I've grown this business, you know, 60x. And so, you know, I believe that you can do both good and have financial success as well. And. And I think that's. That's really fun and really important, and in a world where, you know, we. We have the privilege of making these kinds of decisions, you know, I'm. I'm really proud that Fire Clay is going to be a place where people can come and. And have a great career, get paid well, have phenomenal benefits, take part in their community, know that they're working for an organization that. That cares, and they can feel really proud about that. Now, I think there's some customers who appreciate that. I mean, very few do it, and that's just because it's hard.
- [41:48]
A
So what is so hard?
- [41:51]
C
It's just hard to be held accountable to a higher standard. I mean, it's hard enough to run business and just, you know, get sales and make sure you have product and satisfied needs and make sure you have employees. That's hard.
- [42:00]
A
Right?
- [42:00]
C
You know, and I'll never take away, you know, that. That. That talent, but. But to take it to that next level and hold, you know, your vendors accountable and choose the right vendors to make sure that you're taking care of your employees and saying, I'm not going to pay myself more, and I'm not going to just make sure I can buy my new house or whatever it is, but I'M going to make sure that my people have 401k and life insurance and disability and to think about again, structured community giving where it's very consistent and you're not changing it by whim or just oh, we had a good year, so we'll give. And with this year we didn't. Or on the environmental stewardship side, I mean, you know, we've got a whole kind of team now that has been ingrained to look for any opportunity possible to reduce our natural gas usage, offset electricity usage, do process improvement. And so that's just, you know, that's an intense muscle that we've built over the last decade. And those are just hard things. I mean it takes leadership where you're just constantly, constantly pushing, even just kind of opening up the B Corp assessment and taking it. That in itself is a multi hour thing that I always joke anytime someone has interest and any listener, if you have interest, ping me, I'll send you a bottle of wine and take the assessment. And I can't tell you how many people are like, the wine was great. I never finished the assessment because it's a lot of self reflection. I mean it's like as an individual, it's like getting on the scale. It's really looking at your diet, it's looking at your sleep habits, looking at the friends that you hang out with. It's, it's looking at what you're doing in your free time. It's hard to hold yourself accountable. And I think that's one of the areas that has stood apart for Fire Clay is that we constantly put ourselves under the magnifying glass. We are our biggest critic. We always passionately believe that we can get better. We're constantly just trying to disrupt ourselves because we just know there's always a better way. And that can be exhausting. That can just be an exhausting mentality.
- [43:51]
A
And would a lot of this be easier if you just moved the heck out of California? If you went to Rhode island or you went to some place where there just weren't all these obstacles thrown in your way? I know you're all into the obstacle is the way, but I mean, wouldn't a lot of obstacles be out of your way if you moved out of the great state of California? Surely you must have thought about it, Eric.
- [44:15]
C
Easier said than done. But again, I do think the trade offs are real in terms of the spirit of California. The people who kind of find their way here, they just that kind of entrepreneurial mindset. So no, do I. If I was in kind of the middle of Nowheresville, you know, they'll take that the wrong way, but, you know, some kind of other state in some kind of small town. I mean, no, I think the fact that, you know, we get to be in the Bay Area with incredibly high profile clients who push us very hard because they have incredibly high standards, where you see these other incredible businesses having tremendous success, I mean, that's just, that's hugely inspirational for us. And you know, I said, I'm sitting here in the Fox office and at Fox, I think most of our clients, you know, home values are between 5 and probably $150 million.
- [44:59]
A
I was going to say, are you about to reap the benefit of the huge ipo? Is that why you're staying there? Because yes, the Bay Area is about Cha Ching. It's all about. Everyone's going to cash in. The SpaceX employees, the open air.
- [45:14]
C
It's going to be wild. It will be wild. But no, I mean, you know, it's does. It doesn't. The expectations are high. Of course, the expectations are really high and it's, I love that, you know, being held accountable to that higher standard and being pushed. But yeah, we'll see how everything materializes. That will take years and years to shake out because there's just, just only so much labor in this area and there's only so many things that can get done and permits and such, you know, still take a while. But yeah, the Bay Area has been a wonderful place to operate. It certainly has its booms and busts, but the clients do not get, get me wrong, they are, they are tough. They're really tough and the standards are incredibly high and, but it, it makes us better. So that's fun.
- [45:57]
A
The NDAs are long and detailed and that. Right.
- [46:00]
C
Oh my gosh, Dennis, the, the, I mean, you, you laugh, but the amount of time I actually spend on legal contract review at this business is, is, is real.
- [46:08]
A
Sure.
- [46:09]
C
And again, you know, thank you, AI. Because I think historically, what did they do here? They took these contracts and These things are 20 to 40 pages long. And I mean, literally, if you read these things, it's terrifying what you're agreeing to. You're taking on the entire responsibility of the project. You are agreeing to basically not get paid until they decide to pay you. And if, heaven forbid, it goes to legal for nothing that you did wrong, you're paying for a contractor's bill. So just being able to kind of run it through a custom GPT and send a really kind note to the general contractor Saying, listen, we're really excited to take on this very limited scope of your project and all we ask for is to hold us accountable for our work, to pay us on time, and that's all. Heaven forbid we can just ask for that. And the reality is when we say it that way, everyone so far has agreed, but historically no one read these things because GCS had the upper hand and you just were so hungry for work. But again, great, great place where AI has really served the common person. Because yeah, I mean I hope every, I hope every designer general contractor, you know, is using these things to, you know, protect themselves because they've been so lawyered out. And yeah, anyway, we could talk about that for a long time. But yeah, NDAs are real, legal docs are real and we're, but we're protecting ourselves. So I'm proud of that.
- [47:34]
A
My last question for you, and this is coming back to the AI discussion because I'm so curious, how far off in the future do you imagine your first meaningful agentic AI order showing up for you? That some designer's procurement team is really right, just is using agentic AI and they're putting it into motion. What do you imagine?
- [47:58]
C
Well, maybe I'd ask answer in a different way, which is to say how far off are we to a customer coming in and having an experience where it's like almost fully self assisted through kind of an agentic experience that we're kind of like conversationally going back and forth, we're actually kind of assembling their quote and kind of helping them place an order. And I don't know how far off that is and that's not to scare anyone on our sales team or anything like that because again, I think that you know, there's a lot of orders that our sales team frankly doesn't want to deal with because it's really small or just super time consuming or whatever it might be. And they, I mean most of our salespeople, they want to spend more time with the trade and so I think we're closer. I mean I think that could happen within the next six to 12 months. But again, I think it's, every organization is going to be a little different. I think the reality is all these tools that we all use, whether it's Salesforce, whether it's Design Studio, whatever it might be, like they're all going to have elements of agentic interfaces in there that start to just do work on your behalf. And so I think this is not very far off. Yeah, I mean personally I thought you were going to say, like, when are we going to have robots installing tunnel? That one I don't know yet. But I think in terms of like some of the order entry and some of the kind of more process oriented stuff, I think, I don't think we're actually very far away from it. I mean, it's not a wonder that we are a little bit behind because of the complexity of that which we deal.
- [49:27]
A
Yes, no, absolutely. And honestly, I think everyone should go, should go slow but also be excited about it and see where it goes. But it definitely is going to be changing the process for you. Not that you need another challenge to deal with at the moment. We've made that throughout this conversation. But I'm confident that people are rooting for you. After hearing this conversation, after hearing everything you're taking on and trying to do, I know that they're cheering you on and I'm so glad that I could pull you away from the installations and the tile making to have a conversation with me. And I really appreciate it.
- [50:04]
C
Dennis, thank you so much. Really enjoyed this time.
- [50:10]
B
Thanks for listening. If you'd like to keep up with the latest design industry news, visit us online@businessofhome.com where you can sign up for our newsletter, browse job listings and join our BOH Insider community for access to online workshops, a free print subscription, and much more. If you have a note for the podcast, drop us a line@podcastusinessofhome.com if you're enjoying these conversations, please leave us a review on Apple Podcasts. It helps others to discover the show. This show was produced by Fred Nicholaus and edited by Michael Castaneda. I'm Dennis Scully. Thanks again for listening and I'll see you next week.