327 | Trusting Real Experience Over Credentials | with Jon-Mark Craddock

If you're interested in buying a business as a first-time business owner, buyer, purchaser, the SBA 7(a) program is worthwhile to look into.  

Chase Clymer

Welcome to Honest Ecommerce, a podcast dedicated to cutting through the BS and finding actionable advice for online store owners. I'm your host, Chase Clymer. And I believe running a direct-to-consumer brand does not have to be complicated or a guessing game. 

On this podcast, we interview founders and experts who are putting in the work and creating  real results. 

I also share my own insights from running our top Shopify consultancy, Electric Eye. We cut the fluff in favor of facts to help you grow your Ecommerce business.

Let's get on with the show.

Hey everybody, welcome back to another episode of Honest Ecommerce. Today, I'm welcoming to the show Jon-Mark Craddock, also known mostly as JM. He is an entrepreneur, a brand builder and CEO of La Matera, where he's scaling a premium direct consumer brand with a focus on craftsmanship and authenticity, leveraging his experience at high growth companies like Chubbies, Marine Layer, and Tuckernuck. Welcome to the show, JM. 

Jon-Mark Craddock

Thank you so much, man. Glad to be here. 

Chase Clymer

I'm excited to chat. First and foremost, just take me back in time. Where did you start your career? How did you end up where you are now? Give me the cliff notes. 

Jon-Mark Craddock

Yeah, it's funny. It's not normal for sure. I'm originally from South Carolina and I went to school at College of Charleston and somehow I ended up on a list. My contact ended up on a list for the Chubbies guys back whenever they were starting the company in like 2011, 2012. And I know you've had like a few of those guys on this podcast. You're familiar. 

Chase Clymer

It's the modern day PayPal mafia. The Chubbies.

Jon-Mark Craddock

100%. But yes, so early days I was there. They were looking for college ambassadors and people out there to just kind of get the word out. I mean, there's no better way to get the word out of just giving free shorts away and then us having parties and stuff like that in college. It was great. 

Through that, I started becoming friends with those guys. And then a couple of months later, they're like, we want to bring some folks out to be first ambassador or first intern. And I went out to San Francisco, never really west of the Mississippi. I'm from a small town in South Carolina and went out to San Francisco. 

It was supposed to just be for the summer, but that summer is when  everything really went viral. And so everything broke and it was great. But I was running all of our customer service and everything and towards the end of the summer, they just asked me to stay around. Looking back now, it's like 10 years were spent there at that company just doing crazy stuff. I actually never went back to college.

I didn't finish college, don't have a degree. But I tell everybody that that run was worth so much more than any MBA that I could have ever paid for. 

Chase Clymer

I hear it often on the show, and maybe I'm just hearing myself say it out loud, but the best way to get an MBA is to start a business. 

Jon-Mark Craddock

I could not agree more. I'm not one that's going to downplay college. The reason I got into the career that I'm in is because of college and the connections that I made. But yeah, you don't necessarily have to if you have an opportunity like a Chubbies that rolls up. You don't necessarily have to go. There's no right answer. You know what I mean? 

Chase Clymer

Yeah. And I'm not downplaying college either. And I think college sets you up for success in the real world by teaching you soft skills that you

can't get without being forced into situations you don't want to be in. Working with teams you don't want to do. Doing projects with people you don't know. And then also the power of networking when you are at the right college. 

Jon-Mark Craddock

Totally. So yeah, I definitely think those early years at college taught me to be the opportunistic person that I am. And so it was great. So from Chubbies, obviously, those Chubbies folks are some of my long term best friends, just like I lived in the same room as Tom in the early days.  My closest confidant to this day is Kyle and Dave. I think Kyle has been on this podcast. 

Chase Clymer

Kyle is fantastic. Kyle Hency go check out his episode. I'd say it's probably like six or seven before this. 

Jon-Mark Craddock

Yeah. 

Chase Clymer

What's so funny about all of you Chubbies’ dudes is it wasn't like I reached out to any of you. It's just such a happenstance. I somehow met all of you independently  in this weird, short stretch of time. 

Jon-Mark Craddock

It's so weird. The Chubbies Mafia is its actual thing, man. It's so funny. You look back,  there has to be an abnormally high percentage of former Chubbies folks that are entrepreneurs like our C-suite at companies. It's crazy. You look back and they're all over the place. 

Chase Clymer

I think it would be hard for me to point a finger at another brand that just really showed the power of the direct consumer as the way you're building your business, the power of Shopify, the power of  these new modern ways to market. It'd be hard for me to point at one that had just so many things going for it during that time, other than Chubbies. 

Jon-Mark Craddock

Totally. Yeah. I mean, we got really lucky whenever we were coming up. We had all those exact tailwinds. Shopify was just starting. We were super early at Shopify. Nobody knew what Facebook advertising was back in 2011, 2012. It was just like you could acquire customers for like 4 pennies or something it was something crazy. So yeah, we just had a ton of tailwinds that just  propelled us into the rocket ship that is today. 

Chase Clymer

Yeah. And I think that's worth pointing out that there is a lot of luck in business, but don't let that deter you from trying to do something cool. Because what happens is luck only comes out when you're taking swings. If you're not swinging, you can't have any luck. 

Jon-Mark Craddock

Totally. There's that quote that's like, luck is hard work and disguised or something like that. I totally agree. 

Chase Clymer

Awesome. All right. So I've told this Chubbies’ story on this podcast maybe two or three times from two or three different perspectives. 

Jon-Mark Craddock

Yeah, it's probably boring. 

Chase Clymer

We're over that. Let's move on. So you left Chubbies. What happened next? 

Jon-Mark Craddock

Yeah. I then went over to Marine Layer. They were out of San Francisco as well. I was building a lot of stores towards the end of Chubbies. I went over to help build stores for Marine Layer. I think we built something like nine or 10 stores in 11 months  while I was there. Great group of folks,  great stepping stone for me. 

And then COVID hit and obviously we weren't building the stores anymore. So I got laid off like a ton of people. And from there, I went on to help some other friends at this company called Tuckermuck, which is a ladies Ecommerce company out of DC.

During COVID, they were, I don't know, growing well over a hundred percent like everybody else. It was just like a crazy, crazy time. And their kind of fulfillment and operation was basically imploding. They had three months of returns backed up in Gaylords. It was a mess. And so they brought me in to help kind of manage the fire and just like, all right, we pulled everything out of there, like kind of mom and pop through PL, put it in. 

Actually, I spent a lot of time in Columbus where you're at. During that time, I think I was in Columbus for 11 weeks straight, I would fly from Austin to Columbus every Monday. Now I would fly back on Thursday or Friday every single week for 11 weeks. 

Chase Clymer

The nonstop direct front on Southwest.

Jon-Mark Craddock

It was great, dude. It was great. It was weird. It was during COVID. So it was like, those planes were empty. And like, it was weird. But yeah, I learned a lot through that. That was my second MBA, honestly, just like for supply chain and logistics, running through, figuring all of that all out during COVID. 

And then got to the end of 2022. And I was fortunate enough Chubbies was sold to solo brands. We all made a little bit of cash. I took some of that cash and then bought this brand called La Matera with it. And I knew at the end of 2022, was wanting to kind of depart and do my own thing. 

And, you know, got the team straight at Tuckernuck. The first week of March, I departed and I thought I was going to take, I don't know, a month off or something like that.  And two weeks later, La Matera popped up on a business brokerage site.  It's called quietlight.com. And yeah, I'm going to go at this. I remember the day it just came through. I was looking at all types of deals. And all of them weren't that great. But this one came through and I was like, yeah, this is a no-brainer. I'm going at it. 

Chase Clymer

Yeah. And I'm super excited to ask you. They're not going to be hard questions. It's your life. You just have to answer. I think that we often highlight on this show, people that have built a brand from nothing. There are other ways to get into this industry. You could buy a business that exists. So like you said, you saw this opportunity and you said, I have to go after this. There's some of those reasons. 

Jon-Mark Craddock

Yeah. Well, to start, whenever I was looking like we have, we had looked at a phone case company, we had looked at like a bunch of random kinds of companies.  Whenever this one popped up,  we sold it at Tuckenuck and we sold these belts at Tuckernuck. I like that I was familiar with the brand before they randomly followed me on Instagram.

Like it was all personal, kind of like arrows pointing towards the brand. And then whenever I started getting in, there was just some clear low hanging fruit that I would like, I can come in and make a real difference  and  keep keep repelling the brand. So the brand was already profitable. It was in a good spot. It had a really good supply chain and all that. I think the low hanging fruit was there. There were certainly marketing efficiencies that could have been made and were made, there were a lot of margin opportunities,  just making sure that  the cost of these goods and getting the right partners in place to continue on and be able to scale the company.  

And then there was just like a little bit of,  it's kind of like a little bit of brand soul. Like  being at Chubbies, I was just indoctrinated with having this like soul of a company.

I just saw like, you know, there was some untapped potential on the brand side of La Matera, that it could have been invested in a little bit heavier. And so those were the three things that I really pointed out. And  while I was in there doing due diligence, I was like, why, why hasn't this guy just done this? Like it's very obvious that these like this is low hanging fruit that should have been done.

And then, you know, once you get through the craziness of due diligence and acquire the company and all that kind of stuff, you kind of look back and you're like, oh, like the reason that was easy is because of my experience. And like, it took me like 13 or 14 years of grinding to figure out that, you know, there's low hanging fruits and to see that very clearly.

Chase Clymer

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Chase Clymer

So when you're exploring a company that you might want to purchase, are you keeping  these ideas for growth to yourself? 

Jon-Mark Craddock

You know what I mean? I just look at all of this like one big game, right? I'm not showing my competitors like my secrets for sure. So yeah, there was a little bit of that. It's just one big game whenever you're looking at these things for sure. 

Chase Clymer

Yeah, I think that because at a certain point you are negotiating over the price, which breaks down a ton of different ways. And I really don't care about that part of the conversation. But if you are being vocal about the opportunity and it clicks to the seller, I think that could affect the price. 

Jon-Mark Craddock

100%. Yeah. And so, there's a few cards that you're keeping. It's a balance, right? You're keeping some of your cards that you know will be like game changers for the company. But you also want to make sure that you're putting enough on the table that the seller trusts you to be the new steward of the brand, right? 

Chase Clymer

So If you want to sell to someone that's just going to come in and cheapen it. Something that they've spent years building.

Jon-Mark Craddock

Exactly. Right. It's kind of a push and pull type thing. 

Chase Clymer

And then also just like the way that you can politely talk shit about what's going on to lower the value as well.

Jon-Mark Craddock

Exactly. It's fun. I loved it. Like I personally like, I love the process. I love it like it was wrangling cats. I mean, we like to go through  and we put a chunk of cash down, but we went through and purchased the rest of it with an SBA loan. so that was another player in the mix of an already hard kind of problem that I enjoyed. And luckily, like I said, I departed Tuckernuck. So this acquisition was my full time job.

I just sat down every single day and I prided myself on answering every single email from a banker to a lawyer to the SBA person, everything, within 5 minutes. And we got it done pretty quickly. And I think the deal was done in 3 months or something like that. 

Chase Clymer

Yeah, that is pretty quick. 

Jon-Mark Craddock

Which is pretty quick. 

Chase Clymer

Now talk to me more about using an SBA loan to purchase a business because it's such an easy solution that I don't think a lot of people take advantage of. They're always just like, I don't have any money. It's like the government will give you money. 

Jon-Mark Craddock

Yeah. I am such a big proponent of it. And  it's well, to start like  what we went through is the 7 (a) loan program through the SBA and there has been some negative comments lately over like the SBA because of the PPP loan and the bad actors in there and all that kind of stuff. 

And like it's just two different lanes. It's like a completely different thing. So, yeah, there are bad actors in PPP. That doesn't mean the essay or 7 (a) like program is wrong. 7 (a) program is beautiful, in my opinion. 

And the reason for it is like what you have to go through to acquire a business through SBA is like a colonoscopy. They go through the business and make sure the business is worth what it is. They go through the people and all the partners. They go through everything to make sure, is this situation worth investing in and giving a loan against? And then you have the piece, which is a real thing, you have a PG or a personal guarantee that's attached to it.

From a loan standpoint, it is worth backing whenever all of these boxes are checked, but it is a process. Like it is, it takes, you know, if, if you are working at it 40 hours a week, it will take you three months straight off like a roller coaster ride to get this thing to the finish line. It was like, it's wild.

Chase Clymer

Now you're buying a business.  And the reasons people buy businesses are all over the place. You either want a great job that you want or you're looking to scale that thing and sell it for life changing amounts of money.  It doesn't matter what your goals are. But this is one avenue of which you can take to do it. It just takes work.  

Jon-Mark Craddock

And especially as a new business owner and a first time business owner, there's no better I think it's only the US and Japan that have a similar program as this. There's no better way to do it as a first-time business owner. Those folks who don't have 2 million bucks of cash that they can just throw at a deal like this. It's great. 

Chase Clymer

Absolutely. And then it also helps you keep the cap table low. I don't know how your business is set up. But yeah, it allows you to own more. 

Jon-Mark Craddock

Absolutely. Yeah. 100%. And so I am extremely thankful. If you're interested in buying a business as a first-time  business owner, buyer, purchaser,  the SBA 7-8 program is worthwhile  to look into. 

Chase Clymer

Awesome. So you did your due diligence. Eventually, everyone said yes, you buy this business, right? What happens in the first week, first month, first 90 days? What are you changing or working on to add value and make this all worth it?

Jon-Mark Craddock

Yeah, I mean, you do a lot of this planning in the time before the keys change hands like you're sitting there in the off time. You're like, all right, what's our plan here? Like, what are we going to do with this thing? And so really, it's wild. It's just like it was kind of a weird kind of out of body experience. Like you just change over your bank accounts one day and like you get the keys to the car and it's just yours. 

And you're like, all right, what the hell do I do now? It's just like it's kind of a funny thing. So yeah, we went in right away. We had our three things that we're to do. I was going to inject my  production and factory contacts into the business, which I had already warmed up before. So I was lucky enough at all these previous companies to have really strong supply chain and production  contacts all over the world. And so I injected those folks in there and really started working on that gross margin day one.

We focus on gross margin a lot. Obviously, that's how we all get paid. But we do not skimp on quality. And so I knew it was going to be a long game with some of these production folks and factories of like, hey, I am over patient with this thing. so it took us, with one of my main factories that we use a lot at Chubbies, it took us a full year to get the first PO delivered because the  development of  our belt and the high quality standard that I had was just like, I was not gonna skimp on it. 

And so that was the thing that was like out the gate was gonna be the longest process of getting to the finish line. So I knew we had to do that immediately. Next was just marketing efficiencies. And that was a little bit easier to kind of go out immediately. I had some buddies of mine from Chubbies that were doing that.

I think they were doing their own little agency or something like that. So I just brought them in and plugged them in. Like my specialty is not marketing. And so like, I just plugged in people that were like, that was their specialty. And I was lucky enough to have the Rolodex that came along with my experience. And so that was certainly number two. And then going to that kind of brand soul number three, like I mostly just injected myself as the face started doing like some of these behind the scenes emails started coming from me. 

Like we like it, it's pretty frustrating. It's like you do all of these like fancy photo shoots and video shoots and you spend thousands of dollars and do all this stuff. But every single time a video of me on my iPhone turned around and like talking about this new launch and just like, you know, a  20 to 30 second banger of a video is going to perform well in ads every single time. 

It's like it does not make sense, but it is what it is. Like, and so there's a lot of that now that I just like I do. I don't necessarily feel super comfortable  on video whenever I do those things. So whenever I have to do them, I like, don't know, I'll film a video probably like 20 times to say the same thing. But inevitably it's going to hit on Meta ads  and Google Ads. It's just a fact. 

Chase Clymer

Well, first of all, people like to buy from people and that's why it works. And that's, I think, maybe an opportunity that you saw in the business. I hate to use the term faceless brand, but there was not much.

Jon-Mark Craddock

No, the former owner was there. I just took a page out of the Chubbies book and just leaned in hard. And so the former owner was playing around with that quite a bit. So I don't want to discount what he did. He built a strong brand, that's the reason I bought it. But I just went in a whole lot harder. It was tied to that. One of those things we learned in the early days at Chubbies for sure. 

Chase Clymer

Yeah. And a lot of what you mentioned about things that were going to help make this investment worthwhile were things that you learned from Chubbies and your previous jobs. So one of things that I want to highlight at the end of this is for the folks listening, maybe  starting a business right now and going out on your own isn't the best idea. Maybe go work for some of these awesome brands. 

Jon-Mark Craddock

Yeah. 

Chase Clymer

Get paid to learn all this stuff for a couple of years. And then when the idea strikes, or you find a perfect opportunity like JM here did then maybe go out on your own. 

Jon-Mark Craddock

Yeah, I totally could not agree more. But yeah, I am extremely lucky with  those guys reaching out back in 2011, 2012 and bringing me on and having the trust to bring me on. And then that has built this Rolodex that I have today that I have this group of brands or just life in BUP Visors, honestly.

that I'm able to text or call or anything at any time so that if I have a problem, I can just go to these people immediately. And that is honestly my strongest asset that I'm bringing to everything that I do 100%. 

Chase Clymer

Awesome. Now, JM, we talked about a lot of stuff today. Is there anything I didn't ask you about that you think would resonate with our audience? 

Jon-Mark Craddock

I think one thing that is interesting about this, like all this, is just the hard part. It's a hard game. It is a game that I enjoy. I am a glutton for punishment, I guess, because I enjoy doing it. But you have to have some tenacity to get into this game. You have to have some tenacity to go to the SBA route, to go buy a brand. You have to like just to be a business owner in general, you have to get ready because it's not an easy game.

Obviously there's huge wins and you can pay yourself and the freedom is wonderful. Like I'll ping off here in a couple hours and just go pick up my daughter and hang out with her for the rest of the afternoon. It's a hard game. This is not like an easy sale. Whenever you jump into these things, just like get ready and one, make sure you're surrounding yourself with great people that you like keep pushing you and like are some that are smarter than you basically.  

But then I think also on the personal side, just like, you know, marry strong, I guess, like having a partner that is willing to take the punches with you and go on the roller coaster ride as well. It's just like that my wife is the best part of this whole situation. 

She keeps me grounded. And anytime anything is messed up, she's like, all right, let's settle down. We'll figure this out. It's all good. And so I think those are the two things. This is definitely hard, 100%. Cash is hard to manage an inventory business. That is my main job is just staying alive basically.  And then yeah, as long as you have a good partner at home,  you'll be able to get through anything. 

Chase Clymer

That's beautiful. I think that that's one of the things that attracts young I wouldn't even say entrepreneurs. Entrepreneurs is this weird  idea of financial freedom that comes from an Ecommerce business. You can live on a beach and get a Ferrari. That's not it. And that's why I started this podcast. Yeah. Because that's just smoking mirrors, baby. They're trying to sell you a horse. 

Jon-Mark Craddock

Exactly right. 

Chase Clymer

That's garbage. It's more. It is hard work. It's showing up every day and it's getting all your emails done. It's doing what needs to be done. 

Jon-Mark Craddock

Yep. I totally agree. So yeah, that's my thing. It's just like, it's  not a walk in the park. At the end of the day, it's super fun. 

Chase Clymer

Oh, yeah. 

Jon-Mark Craddock

I really enjoy it. So I recommend everybody just go do it. Even if you fail, whatever, it'll be fun. 

Chase Clymer

Awesome. You talked about how  much you enjoyed the brand even before you purchased it and there's the quality of the products. If people want to go check out your products, where should they go? What should they do? 

Jon-Mark Craddock

Yeah, they can go to lamatera.com. It's L-A-M-A-T-E-R-A.com.

Chase Clymer

Awesome. JM, thank you so much for coming on the show.

We can't thank our guests enough for coming on the show and sharing their knowledge and journey with us. We've got a lot to think about and potentially add into our own business. You can find all the links in the show notes. 

You can subscribe to the newsletter at honestecommerce.co to get each episode delivered right to your inbox. 

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Lastly, if you're a store owner looking for an amazing partner to help get your Shopify store to the next level, reach out to Electric Eye at electriceye.io/connect.

Until next time!