From 20 years working in the industry to almost 20 more years in their own business, Adam and Deb Drexler dig deep into their approach to business culture, taking risk and coping with copycats.
“You can’t be in business and not worry, it’s a very worrying thing – not for the faint-hearted,” says Deb.
However, the husband-and-wife duo who own and operate eclectic homewares retailer Matt Blatt suggest there are practical ways to cope with, and even thrive on, these “worries”.
Joining the My Business Podcast, Deb and Adam share their business approach to:
• Determining the right level of risk for growth
• Coping with copycats that threaten to steal their customers
• Strategising according to the “royal order of the tummy compass”
• Which is more important – culture or competence?
And lots more!
Announcer: Welcome to the My Business Podcast. Insight, inspiration, and wisdom for business owners, wherever they may be. Here are your hosts, Adam Zuchetti and Andy Scott.
Adam Zuchetti: Welcome to another episode of the My Business Podcast. I'm here with my regular cohost, Andy Scott. We're joined by not one but two special guests in the studio today. They've been in business for close to 20 years, since the very early days of the Internet, with a further two decades industry experience under their belts prior to that. Over that time, they fended up various trials and tribulations from copycat competitors and determining how to take risks in order to grow but without stifling what they already have built. They've also gone through picking up the pieces of poor staff hiring and other people management issues and everything else that you could probably imagine as a business owner. They're also a husband and wife duo, which is one aspect we haven't covered much in the My Business Podcast previously. It's great to be able to pick the brains of Adam and Deb Drexler who own eclectic homewares retailer and Matt Blatt.
Andy Scott: Let's talk about the expansion of the business. You say it's been running for 13 years now. 13 years?
Adam Drexler: The business has been running for 18 years.
Andy Scott: 18 years. Sorry.
Adam Drexler: But I'm talking about the Matt Blatt pattern business. But prior to Matt Blatt, we were in the furniture business for another 20 years or so. We were manufacturing and selling to retailers, so it was a progression from there into Matt Blatt.
Andy Scott: How long was Matt Blatt just a single store?
Adam Drexler: Well, at first, the Matt Blatt wasn't a single store. All it was, just a sales over the Internet. When I say over the Internet, I mean eBay. That's where we started on, eBay. We were selling office chairs on eBay. We were the first Australian company to sell office chairs on eBay. I'm talking about the year 2000 here when eBay started in Australia in 1999, and 2000, it was pretty new. In those days, it's not like Internet shopping today. People weren't trusting it. They didn't like the idea of paying their money before getting their goods, and so on.
We started selling office chairs. They sold really well. We're making good margins. We're bringing in more designs. We'd bring them, the chairs in from China. We're bringing in more designs of chairs, and we were expanding our range. But not long after that, other traders could see what sort of business we were having and they-
Deb Drexler: They copied it.
Adam Drexler: ... they started doing the same thing, and prices started going down. To get the business in they dropped their price, they brought the same model of chair in, they dropped the price a bit, and they got the sales instead of us. On eBay in those days, things were pretty much an auction. Everything was price related. People were very price conscious. If they were going to give away their money without seeing the product, without getting the product, they wanted a trade-off. The trade-off, they wanted cheap.
Andy Scott: Right. Give away as little as possible.
Adam Drexler: Yes. At that time, we were also bringing in some very high-quality furniture from overseas, which was recognisable. That was selling well on eBay also. We were trying things out. We'd see these chairs by famous designers or tables, and we didn't know if we could sell it or not. They seemed rather quite expensive to me at the time, and prior to that, we were selling chairs for $39. There was a beautiful timber chair that came in. I remember saying to Deb, "Can we sell this chair for $199?" It wasn't what we were doing in those days.
We were adventurous, and we brought in new stuff. When that started selling, everybody else brought in the new stuff. So we thought, "Look, we're trying stuff out. We're making hits and misses, and they're just making hits. They're not taking any risk." We took our business from eBay offline, and we went online with our own website where we just put a price, and nobody would know how much of a particular item was selling. They didn't know if it was a successful line or not. That worked for us.
Andy Scott: What year was that?
Adam Drexler: That would've been about the year 2002.
Andy Scott: So quite shortly after you started selling on eBay then.
Adam Drexler: Yes. Yeah. It was a very average website, to say the least. I designed it myself. But it worked. We were getting traction. We were getting increasing sales. Everything was going okay.
We thought that what we really need is a showroom for people to come and see the products. We felt that that was a bit of a downfall of the model we had. With furniture, I believe that unlike books or videos of clothing, people need to see the product. They need to feel it. They need to sit on the sofa. They need to look at the colours of the fabric. A red colour on my monitor would be different to on your monitor. It's more tactile sort of product.
So once we opened up a showroom, business really picked up. At that point, we began our expansion, and things really got good. Sales picked up enormously. We became known for a certain quality of furniture on the Internet, but you could also see it.
Andy Scott: That's what I was going to ask because you said you had this, you were selling $39 chairs, and then you got this $199 chair, and you didn't know if you'd sell it. Did you find that opening up that store and it was necessary for you to sell high-priced items or did you find that opening up the store allowed you to sell more higher-priced items because of that tactile experience.
Adam Drexler: Yeah. It did. It did.
Deb Drexler: It's a symbiotic thing. Yeah.
Adam Drexler: It did allow us to sell high-priced items. Debra's got a good story about that customer who came in and saw a Noguchi table.
Deb Drexler: Ah, the replica. Yeah. Yeah. We got the replica Noguchi table, which is a big glass, like a three-sided glass table and sort of, it looks like it's floating. People wanted to come. They wanted to come and see things. They really weren't on play with all these new designs. We weren't either, but anyway, she came in, and she was not from here. She was South African, and she said, "Oh, I'm not convinced. I'm just not convinced." It was just interesting seeing people's reactions. We didn't know either. We didn't know we were convinced, but it was just funny.
Adam Drexler: We would have customers coming into our store, and we didn't know that much about design and furniture.
Deb Drexler: All these ... No.
Adam Drexler: We'd have a customer come in, and she's say, "Oh, I was in New York, and I saw this fantastic armchair at my son's place. It's called the womb chair. It was really good. You should think about getting it." I said, "Okay. Okay. Thanks." As soon as she left, we'd be typing womb chair on Google and go, "Wow. Look at this chair." The next time we're in China, we'd see it there or we'd ask for it, and within six months or year, we'd have it.
Deb Drexler: Yeah. It was very exciting. We'd look at the designs and-
Adam Drexler: We were learning from our customers.
Deb Drexler: Yeah. And customers would ring up, and they'd want to talk about them. I'd just come from teaching, casual teaching, and kids never want to listen to you. Here I was. All of a sudden, I was an expert. I just kept saying to Adam, "I can't believe people are hanging on every word I say." People would come in, they would ring us, and they thought I know everything. They'd ask all these questions. I had a captive audience. Coming from a classroom, it was so exciting. I just loved it.
Andy Scott: Did you feel it was became incumbent on yourselves to then, "Geez-
Deb Drexler: Yeah. We were educating people.
Andy Scott: ... people think we are experts. We'd better learn a bit more."
Deb Drexler: Absolutely. We were educating ourselves as well as educating people. It was very exciting, such exciting times, bringing all these things in. We'd sit them in the showroom, and we'd have a look at them and think, "Is anyone going to buy this? What is that?" There were some really unusual designs to us at the time. Nowadays, the market's saturated, and everyone's really familiar with all these designs. They're everywhere. You've got some Barcelona chairs in your office over there.
Adam Drexler: You've got some.
Deb Drexler: They're everywhere, but initially, it was all new to us. It was new to our customers. It was really exciting. I think everyone felt the excitement. It was a great time.
Adam Drexler: There was a huge demand for these designer furniture pieces in those days.
Deb Drexler: Yeah. People were flocking.
Adam Drexler: There still is today to some extent.
Deb Drexler: Yeah. They're still popular. Classics.
Andy Scott: Have you found it's helped you stay ahead, I suppose where the business, because as you've sort of said, when you to go to eBay, everyone started copying you.
Deb Drexler: Yes. Yes. You have to be.
Andy Scott: When you started selling things, everyone started copying you.
Deb Drexler: You have to be one step ahead all the time. As soon as people started hopping on the bandwagon, we were trying to think ahead to something else. I think in our business, any business, you have to be one step ahead all the time. You have to keep dancing as fast as you can all the time, so that you're left them behind, sort of, and you're still thinking of something new constantly.
Adam Zuchetti: How do you actually do that though because everyone wants to be that one step ahead, and everyone's trying to achieve that?
Deb Drexler: I don't know. How do you do it? You love change. You embrace change.
Adam Drexler: As I said before, we're pretty adventurous, and we try new things. We've got a thing together who are pretty good.
Deb Drexler: And Adam loves change. I've never met anyone who embraces change so much.
Adam Drexler: Change. Yeah. I do like change.
Deb Drexler: We're all sort of like to be stuck in our ways, and we're happy to just keep ordering the same things, and Adam's pushing us all the time. "Do something else. No, look at this one. Come on. Get out. Look at that." He just embraces. In all aspects of our business, I think that's really important, and that's something he's just so wonderful at. A lot of us don't want to move. It's a natural inclination to stay where we are. Adam's like, "Come on." I mean in all areas, aren't you?
Adam Drexler: Yeah. I embrace change.
Deb Drexler: You do. He does.
Adam Drexler: Our business is about change. I'll give you an example, to answer your question from before. We were building up our business. We decided to bring in a lighting range. We just had furniture. We decided to bring in lights. We brought in the lights, and it worked really well.
We had competitors in the industry in those days. They would bring in lights after they saw us bring in lights. They're watching us, and they were watching which direction we're going. When we got lights, six months or a year later, they would come with a lighting range similar to ours, probably from the same suppliers even, right, in China.
But we had the advantage. It was, we thought about it. They were copying us. When you copy someone, you're copying ideas of what they had six months ago that are only now into practise. So they can't copy the ideas we've got today, that are going to manifest themselves in six month's or a year's time. They're just copying the past. They're not copying the present or the future.
That's our advantage. You just have to keep being innovative in not just in the product, but in your business model, in your marketing, everything.
Andy Scott: Tell us about your decision-making process toward change because in my experience, that's the thing that most people don't like change is because it's hard to make a decision. It's easy to sit where you are. You can always make the excuse that, "Well, I need to know more. I need to know more before I make the decision." Talk us through your decision-making process.
Deb Drexler: I just want to say one thing first. I think that part of it is the fact that we're a family business, and there's often involved in the decision-making is myself, Adam, and Joel, our son. One great strength for us is that we can make decisions very quickly. We can decide from one day to the next. We don't have to ask anyone. We don't have to go through a board. We don't have to go through any other people. Sometimes, it's just so important, you feel the royal order of the tummy compass, as they say. There's a gut feeling, and you just go with it. You make the decision really quickly. I think that's part of our strength.
Adam Drexler: Yeah. That's right. Yeah. That's right.
Deb Drexler: That's part of the decision-making. That's really important for us. So quick from day to day.
Adam Drexler: Someone will have an idea, and we'll discuss it.
Deb Drexler: And that's it. Do it.
Adam Drexler: We'll say, "Yeah. That's a really good idea." Often, it's pretty obvious it's a good idea, and we'll say, "Yeah. That's a really good idea. How much is it going to cost? What's the effect?" We'll talk about the upside and the downside, and if we think it's a good idea and we should do it, then we do it.
Deb Drexler: We do it. Very quickly. That's part of the change and the decision-making. Very quick.
Adam Drexler: Like I'll give you an example from what's happening at the moment. We find our products, a lot of it comes from China, Vietnam, Malaysia. Some come from Europe. We have tried bringing in products from India before. The problem we had with bringing in products from India is the quality has been a bit hit and miss and more often miss than hit, so we deiced it's not worth it.
We've got this new lady. What would you call her?
Deb Drexler: She's probably, a buyer? Or a quality control ... I don't know. She does a bit of everything.
Adam Drexler: No. She's be a product developer or something. She came from a lot of experience from other companies that are much bigger than us in furniture. She said, "Why aren't you buying from India?" I said, "Well, we never could make it work." She said, "Well, I know this guy who owns a company. He supplies all the majors around the world. They don't actually make everything, but they source products for you, and they will check the quality as it's being manufactured in the factories in India. They will recommend a certain glue is used, which is European-made glue instead of an Indian-made glue. They will make sure that this product is made to your level of quality so that you don't have this problem. For that, they'll, we take a fee," right?
This opened up a whole new world for us. The Indian makes fantastic stuff. They have terrific fabrics. They burn inlay cabinets and things like that. We've made a decision overnight by talking about it that this is a new direction we're going to head into. We think this is a really good idea. Not only we're going to get really good quality products, but we feel that these products are not going to take away sales from our existing products because they’re a totally different look and different quality and different design.
That's just an example of how quick we can move. We don't need to ask budgets, this or that or the other. We know it's going to work. We've had the experience. Let's do it.
Andy Scott: You make quick decisions. Obviously, some of them work. A lot of them work. What do you do when you've made a quick decision, and it's gone wrong? That must happen.
Deb Drexler: Especially with staff. We've made a few decisions with different staff members, which have been ugh, devastating. A year later, you're still picking up the pieces of devastation that they've done, but-
Adam Drexler: You're referring more to product and style.
Andy Scott: Well, either or.
Deb Drexler: Well, look.
Andy Scott: I don't want to be prescriptive.
Deb Drexler: Products is not so much, is it? It's-
Adam Drexler: Look. We make mistakes all the time.
Deb Drexler: It's a people thing, it's the hardest.
Adam Drexler: We understand that to be innovative and to move forward, you got to make mistakes. If you're not making mistakes, you're not trying hard enough. You're not trying new stuff enough. With mistakes, we bury the losses. They're never-
Deb Drexler: You have a really good idea about neutralising things. When there's really negative things or things that have just haven't worked, Adam's always got a good philosophy about neutralising them and so that you almost learn from them, and you go on from them. Often, that's some of the worst things, great things come out of them. You think it's true. You think, "Oh, this is just a terrible decision," or, "These are just so awful," and then you work from it, and good things always come out of it.
Adam Drexler: When I started out in business, I had this accountant. He said to me, "Here's some advice. Take risks, but don't ever take a risk that's going to break the bank. That's going to send you broke."
At our level of business today, we can afford to take risks, and if they don't work, it's not a major disaster for us. We don't generally take risks that are major disasters. We take some risks, which can lead to bigger loss than others, but, and for example, I'll give you an example of one risk we took say five or six years ago, about six years ago.
We moved from our smaller warehouse in Marrickville to a very large warehouse facility in Regents Park. It's 14,000 square metres. This was about six years ago. A warehousing facility in those days was 4,000 square metres, so we're sort of like times four.
We felt that we couldn't grow with what we had, and to have expansion and growth, we needed bigger premises. We actually got premises that were bigger than what our needs were at that time. We had an expectation that we would grow into it. Now, if that didn't work, that wouldn't have wiped us out, but it would've put a big dent in our finances. But it didn't. It worked. It worked well for us, and it was a pretty big risk. That was one of the big risks we took at that time.
Deb Drexler: We've always had the attitude that he could go and do taxi driving and I could go back to teaching. I remember at one state, he was looking through the job ... We were sitting in our bed. I was looking through teacher jobs, and he was looking through taxi jobs. He thought, "I'll go back to driving." We just thought, "That was the worst that can happen." That's the worst. That's you know.
Andy Scott: Didn't either or you worry then that one of you wasn't telling someone the whole story?
Male: Worry? I worry every day. I'm still worried today.
Deb Drexler: Worry? We’re worried all the time.
Male: Why didn't you look at, why, what the-
Deb Drexler: We're always worried.
Andy Scott: This is our emergency plan. Why are we both looking at it right now?
Deb Drexler: You can't be in business and not worry.
Adam Drexler: We always worry.
Deb Drexler: It's a very worrying thing.
Andy Scott: True.
Deb Drexler: It's not for the faint hearted. Oh, God. It's at your feet all the time. It nickels at you all the time. You never get away from it when it's your own business.
Andy Scott: How do you deal with that? You said you live together, you work together. There's obviously that worry that comes with running a business. How do you make sure that that doesn't mean you're shouting at the kids, and you don't want to see the family, and you're sitting at opposite ends of the sofa in the evening because of the stress that it brings?
Adam Drexler: How many times have you shouted at the kids in our life?
Deb Drexler: Not many. Our kids are precious, but I go out and do yoga. That was the one stipulation, even when I started, when I had to go in every day. We hardly did anything. Monday morning was my yoga morning. It keeps me together, my framework for the rest of the week. I need that two hours of doing yoga. It's just my things, but-
Adam Drexler: Look, I have found myself when things get really bad, and they have in the past. Look, before we started importing, we're manufacturing, and we almost went broke. We had our house on the line in those days. It was very stressful, but I find that when I worry a lot about it, when I'm really stressed out, the best ideas come out. It's sort of like you're under pressure and-
Deb Drexler: Your adrenaline's running.
Adam Drexler: Your adrenaline's running, and you're under pressure. You're forced to think of something that's going to save the day. It always has so far. I don't know if that'll hold well for the future, but-
Andy Scott: Necessity is the mother of invention, as they say.
Adam Drexler: Yeah. Something like that. Yeah.
Deb Drexler: Yeah. But we enjoy it too. It's fun. It's all sort of fun as well.
Adam Drexler: Every now and then, sometimes when things don't go the way we want, Debbie will say to me, "Hey, Adam. Are we still having fun?" "Yeah." "Okay. Let's keep going."
Adam Zuchetti: Talking about worry, though, coming back Deb what you were saying about staff, that's obviously one of the, I think probably the biggest worry-
Adam Drexler: Yeah. Absolutely. People. Absolutely.
Adam Zuchetti: Bet you anyone in business has is the people they bring on. Without sort of naming names or going into anything really identifying, can you talk us through what those really big challenges were?
Deb Drexler: Well, they still remain today. People. Yeah. You got to get the right people on the bus. I always say, it's a cliché, but when you get the right person, the magic happens. We see it time and time again. When we get the right person, it's wonderful. Things happen that you just ... It's all open-ended, and you just don't know what the ramifications are. It can be so wonderful. They work well with other people. There's ideas come out, and it's just like they're part of our family, and it's just so great. Good stuff really comes out of it.
On the other hand, we've had people that have just, it's been devastating, and they just haven't worked. They drag everyone down with them. It's always hard to say goodbye, but you realise they're not the right passenger for your bus.
It's a big challenge, but it can be wonderful, or it can be dreadful. It's never just an okay sort of thing. I think it's one or the other. I think at the moment, we've got such wonderful people. We keep talking about how great ... It seems to be getting better and better. We just seem to be hiring and becoming aligned with such wonderful staff members now that, they know heaps more than we do. We just leave so much of it to them.
Adam Drexler: Well, that's it. You really have to employ people that are smarter than you because that's-
Deb Drexler: Yes, and I find buying is very interesting too because I buy a lot of products. I have a colleague, one of our colleagues has been with us for about eight years. She's really like a member of our family. She just comes away with us, and we all buy things together. We're all on the same wavelength. That's been so productive and so gratifying. It's been a wonderful part of the business too, have people that work with us and collaborate, and that's been something, when you work with someone and sparks fly, it can be such an enjoyable experience. That's a great thing. It's still a challenge, and sometimes, it's a disaster. It's a bit of everything, but-
Andy Scott: You mentioned you've got staff that are great to work with. Adam, you mentioned that it's important to employ people smarter than you. With experience, what do you think is more important? The competence or the culture of the individual?
Adam Drexler: Look, if you have someone-
Deb Drexler: It's a package.
Adam Drexler: ... who doesn't appreciate the culture of our business, they're not going to stay. They're not going to stay in our employment. They're going to be unhappy and move on. So really, it's the culture's got to be right for them to stay, and their level of competence has to be right. The culture has to be right for them to want to stay, and the level of competence has to be right for us to want them to stay.
Deb Drexler: But the moment, we've got it right. We had a pink lunch the other day. It was wonderful. It was for breast cancer. Everyone brought something to eat, and everyone dressed in pink. It was so fantastic. Everyone commented later how it was such a wonderful lunch. We all got together, and we ate, and everyone put some money in for breast cancer. It makes us so proud when we look at our staff and how wonderfully they get on. There's a lot of quirky characters, a lot of very creative people. They all add to the mix. They've all got great ideas. Don't we feel proud?
Adam Drexler: Very. Yeah.
Deb Drexler: We feel so proud of them and what we've created. You stand back, and my heart just swells. I feel at the moment, we've got everyone we love. So it's just like a present every day when we go to work. It's a wonderful thing.
Andy Scott: Do you actively try and foster that team environment? You mentioned you did a luncheon. Is it something you guys actively foster?
Deb Drexler: We feel it starts from us. We love and respect each other. We love and respect our kids. Our kids are involved in the business as well. We feel that it starts with us. We have a wonderful culture, us four, and it goes from there. I think everyone feels it. It's, yeah. It's brilliant.
Adam Drexler: We have a lot of very passionate people in all aspects of our business. I sometimes wonder how they can be so passionate? It's not their business, but they connect with it. They're just very enthusiastic and passionate. You get people like that, you get good work coming out.
Deb Drexler: We feel lucky.
Adam Zuchetti: How many people are you up to now in the business?
Adam Drexler: Around 200.
Adam Zuchetti: That's quite a sizeable operation then?
Adam Drexler:Yeah. It's a sizeable operation. Yeah.
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