Mar 13, 2023 · 1h 24m · how-i-built-this
Xero Shoes: Steven Sashen and Lena Phoenix
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of How I Built This, host Guy Raz interviews Xero Shoes co-founders Steven Sashen and Lena Phoenix about how they transformed a homemade barefoot running sandal into a multimillion-dollar global minimalist footwear brand.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Guy holds 33.4% of the talking time here. How this is scored →
Guy as informed peer 0.9 Guest teaching 1.3 Guest disagreement 0.5 Guy pushing back 0.6
speaking balance: gold is Guy, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 43:45 Steven pushing back on the 'tiny market' premise
Steven immediately interrupts and rejects Guy's characterization of barefoot shoes as inherently tiny, asserting that human anatomy makes barefoot footwear the universal default across history.
Hardest push from Guy ▶ 22:00 Guy pressing on financial liability in VA notesGuy interrupts to press Lena on why they would still be liable if buyers default, forcing Lena to clarify the distinction between renting and selling under assuming mortgages.
Biggest teaching moment ▶ 49:40 Lena explaining manufacturing complexity in minimalist shoesLena educates Guy on why minimalist shoes are harder to manufacture than conventional shoes, explaining that thick foam midsoles allow standard brands to hide manufacturing defects with glue.
Guy holds their own ▶ 29:00 Guy contextualizing the history of running shoes vs natural formGuy summarizes the evolutionary and biomechanical thesis of Christopher McDougall's 'Born to Run', explaining the shift away from 1970s padded athletic shoes.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Guy as informed peer | Guest teaching | Guest disagreement | Guy pushing back | Why |
|---|---|---|---|---|---|---|
| Steven's Early Years: Gymnastics, Magic, and Stand-Up Comedy | 0 | 0 | 0 | 0 | Guy Raz facilitates the narrative about Steven's early career in comedy and transition from Duke to New York. Steven shares colorful anecdotes in a relaxed, cooperative storytelling mode. | |
| Developing ScriptWare Software and Entering Internet Marketing | 1 | 1 | 1 | 1 | Guy asks about ScriptWare's commercial viability and competition, jokingly asking if competitors built a better mousetrap. Steven explains the cutthroat reality of dealer margins locking him out. | |
| Life Philosophy, Passive Income Goals, and 'Disc Doctors' | 1 | 1 | 1 | 0 | Guy asks what grand objective drove Steven during his varied Boulder ventures. Steven reframes the question, clarifying that he lacked an overarching grand strategy and was simply following Joe Dominguez's early retirement philosophy. | |
| Courting Lena Phoenix and Establishing a Partnership | 1 | 1 | 2 | 1 | Guy humorously probes their relationship origins and assumes they were immediately an item. Lena and Steven laughingly correct his premise, recounting Steven's persistence and Lena's initial skepticism. | |
| The VA Repo Note Business and Financial Turbulence | 1 | 2 | 1 | 2 | Guy drills into the mechanics and risks of assuming VA repo notes, occasionally mischaracterizing the buyers as renters before Lena and Steven clarify the financial structure. | |
| Mid-Show Break: The 5K Run That Sparked an Idea | 0 | 1 | 0 | 0 | Guy sets up Steven's return to sprinting in his 40s. Steven explains how conventional cushioned footwear repeatedly caused injuries before he encountered barefoot running. | |
| The 'Born to Run' Movement and First Sandal Kits | 2 | 2 | 1 | 1 | Guy provides background context on Christopher McDougall's 'Born to Run' and indigenous footwear. Steven and Lena explain why Vibram FiveFingers failed them and how homemade Tarahumara-style rubber sandals solved the issue. | |
| Launching 'Invisible Shoes' and Guerrilla Marketing | 1 | 1 | 0 | 0 | Lena and Steven detail launching 'Invisible Shoes', using SEO video tutorials and guerrilla business cards tucked into McDougall's books to generate early kit sales. | |
| Bootstrapping Operations and Committing to the Business | 1 | 2 | 1 | 1 | Guy suggests the barefoot running market was tiny, prompting Steven to push back by explaining that minimalist footwear appeals broadly beyond running to everyday comfort. | |
| Initial Custom Outsoles and the Korean Mold Flaw | 1 | 2 | 0 | 1 | Guy asks why manufacturing a simple piece of rubber outsole proved so complicated. Lena educates him on how minimalist shoes cannot hide molding defects with layered EVA foam or glue. | |
| Mid-Show Break: The Pivot Ahead | 0 | 0 | 0 | 0 | Guy recaps the Korean factory failure and introduces the pivot to a Chinese manufacturing agent and rebranding to Xero Shoes. The founders recount being blacklisted by Korean molders. | |
| The Shark Tank Phenomenon and Dennis Driscoll's Expertise | 1 | 1 | 0 | 1 | Guy discusses the Shark Tank appearance and Kevin O'Leary's lowball offer. Lena and Steven discuss the media wave that followed and partnering with former Crocs designer Dennis Driscoll. | |
| Designing Closed-Toe Shoes and Customer-Driven Growth | 1 | 2 | 0 | 0 | Steven describes gathering thousands of customer foot tracings to build custom foot-shaped shoe lasts. Lena explains the difficulty of convincing traditional factories to omit stiff heel counters. | |
| Navigating China Tariffs, $5M Debt, and TZP Investment | 1 | 2 | 0 | 0 | Lena explains the high-stakes balancing act of personally guaranteeing $5 million in debt during China tariff surges before turning it into an advantage when the pandemic shut down factories. | |
| Disrupting Footwear and Gaining Health Perspective | 2 | 2 | 1 | 1 | Guy questions how Xero can scale in a tiny subsegment of a massive global industry. Steven and Lena reject the niche classification, noting crossover appeal to athletes, celebrities, and kids, before Steven opens up emotionally about a recent health scare. | |
| Reflections on Luck, Hard Work, and Steven's Recovery | 1 | 1 | 0 | 0 | Guy asks his standard closing question on luck versus hard work. Lena and Steven break down how both play an interdependent, 100% role in entrepreneurial survival. |
Statements from this episode (23)
Sashen shuffled balances across 17 credit cards to avoid paying interest
“I had about 17 credit cards with zero percent balance transfer fees, and that also gave you either frequent flyer points or some other bonus, even for a balance transfer. So about, for six years, I was just shuffling balances from one card to another, racking …”
Threatened incumbents will sabotage rivals before improving their own products
“When you threaten other people's livelihoods, they don't go, congratulations, you have the better mousetrap, and walk away. They will most likely went back into a corner, try to screw with you before they try to improve what they're doing.”
VA repo mortgages could be assumed for $4,000 in the mid-2000s
“I mean, you could basically assume one of these mortgages for four to 6000 dollars.”
Footwear should enable natural body movement rather than interfere with it
“The gist of it is everything we're going to talk about when it has to do with our business. It's not about footwear. It's about natural form. It's letting your body do what bodies are made to do naturally without getting in the way.”
Barefoot running hurts if done incorrectly but feels great done right
“So if you're running in bare feet or something truly minimalist, doing it wrong hurts, doing it right feels great.”
Xero Shoes would not exist if Vibram FiveFingers had fit Sashen properly
“Had those things fit my feet, we would have never started Zero Shoes.”
Heel straps let toes relax, unlike flip-flops which require constant effort
“That strap around the back is actually really important, because flip-flops actually take a lot of effort to keep on your feet. But when you just have that strap around the back, then your toes can relax, and your foot can move as intended.”
Sashen slipped 50,000 Xero Shoes business cards inside 'Born to Run' books
“I would I printed up a few thousand business cards, and I would go to bookstores and find his book, and then insert our business card in the book.
and then eventually I made like 50,000 of those and sent those to customers and asked them to do the same thing…”
Xero Shoes scaled from $114,000 to $500,000 in its first three years
“So our first year, we did a 114,000 in revenue, and the, that was our first 12 months, so late to twenty-oh nine. Late to twenty-ten. Twenty-ten... And so we, our second year in business, and we're not getting paid, you know, everything is going back into the …”
Xero Shoes created the first outsole specifically designed for barefoot running
“These guys helped us with the initial design for what was actually the first outsole specifically designed for barefoot style running”
Traditional multi-layer shoe manufacturing hides quality control defects with glue
“In a regular shoe there's a lot of layers, and they all get glued together. And it really doesn't matter how accurate you are with quality control and quality assurance. So you can hide a lot of mistakes with glue.”
The founders put $100,000 on credit cards to finance shoe molds
“We had put about a 100,000 dollars on those credit cards to pay for the cost of the molds, and we had to pay in advance of selling the material.”
Factories initially lose money on new manufacturing clients and take a bet
“It's very difficult to become a new manufacturing client because the factory is losing money on you. They're really, they're taking a bet”
Xero Shoes' website hit 270,000 concurrent visitors during Shark Tank appearance
“Yeah, we had 270,000 visitors at the same, at one time for about 12 minutes.”
Xero Shoes generated 10% of its lifetime sales in one week
“And then about 45 minutes after the airing, then the phone started blowing up as well, and the orders just started pouring in, and we did 10% of our lifetime sales volume in that week.”
Xero Shoes' original Chinese manufacturing partner secretly patented their design
“We learned that our first factory had actually patented our Saturnal design in China, so that was something we had to deal with.”
Xero Shoes based its closed-toe shoe shapes on 5,000 foot tracings
“So we had about 5000 foot tracings, and we mapped those out to come up with the right shape for a shoe.”
Xero Shoes built an email list of nearly one million subscribers
“So our email list is, you know, just shy of a million people. And we have a list that we call our inner circle list for people who raise their hand and say, they really want to help. And it's like 70,000 people.”
A multibillion-dollar rival pressured a major retailer to drop Xero Shoes
“When we were first trying to get into retail, we had a significant order that was supposed to get placed one day by a major, major retailer. And at the end of the day, the order didn't come through, and we called and said, what happened? And from investigating…”
The co-founders personally guaranteed $5 million in business debt by 2020
“By 2020, we had personally guaranteed
Five million dollars in debt financing, a combination of SBA loans, the, this family office, as well as short-term lines of credit,”
Rapid business growth increases the probability of a company eventually collapsing
“The greater it is, the higher the probability of collapse, because you're always going to end up over leveraged in some way, or subject to some weird change. I mean, I think of companies that have one major wholesale account. If that one account, if anything c…”