Nick Mowbray, co-founder of ZURU, tells the story of building a $2B+/year empire from nothing — starting with a New Zealand dairy farm, door-to-door hot air balloon sales, and sleeping in bushes at Hong Kong airport. He covers the scrappy early China years, the breakthrough products (Robo Fish, Bunch O Balloons), the pivot into FMCG (diapers, Monday haircare, pet food), and the moonshot ZURU Tech project building fully automated housing factories. Throughout, the throughline is radical first-principles thinking, pathological frugality, and grit over talent.
Speakers: Sam Parr (host), Shaan Puri (host, intro only), Nick Mowbray (guest, co-founder of ZURU)
Cold Open [00:00:00]
Nick: It seems like it was an insane decision — go to China with no money, no plan, no relationships, no language skills, slept in a bush, and literally built your own factory.
Nick: That was a disaster. When I say we were naive, I feel like that is even an understatement. But to be fair, success is a bad teacher.
Nick: In our business now, I’m a huge believer in firing bullets and failing fast. And then when the bullet works, it’s a cannonball — we invest and we build the recipe around that.
Sam: How big is the empire today?
Nick: Little over two billion US in revenue. And it’s growing about 25 to 30% year on year.
Sam: And it’s public — or it’s not a public company?
Nick: Not a public company.
Intro and Origin Story Setup [00:01:00]
Sam: So here’s what’s fascinating to me. I have a love language when it comes to business, and my love language is: self-made, dropped out of college, family business, multi-billion dollar company with no outside capital. You hit all of the things on my little bingo card there, which is what got me interested.
I want to start with the origin story. Here are the bullet points: grew up on a dairy farm, started selling door-to-door hot air balloons, was in law school, then quit because he didn’t like walking up a big hill every day, and then made a crazy rash decision — moved to China with no money, no plan, no relationships, no language skills, slept in a bush, and somehow turned that into a billion-dollar company.
That’s the bullet points. Can you unpack that a little bit?
Nick: That’s quite accurate. That’s a good way to summarize it quickly.
If I was to frame up our probably first ten years, it’s that famous saying: success is going from failure to failure with no loss of enthusiasm. I think that actually really does sum us up.
Grew up more or less on a farm, and then we moved north for our schooling. My brother won the New Zealand science fair with a model hot air balloon, and then he decided — he was twelve — that we should make these kit-set balloons and sell them door to door at festivals when we were at school. I’m slightly younger than him, so he kind of hired me as — and when I say “hired,” I was the free labor — to help make the hot air balloons.
We used to make these model hot air balloons and sell them door to door. When I was quite young, I’d get my friends together and backpack around New Zealand and sell door to door. I can tell you, learning how to sell door to door is a great life lesson, because you never know who’s behind that door and you never know what response you’re going to get. On top of that, selling a flying burning plastic bag is particularly hard to sell. It really hones your skills early on.
Learning to Sell Door to Door [00:03:30]
Sam: What was your technique?
Nick: I used to be like, “We’re just a small company trying to get off the ground” — wink wink, no pun intended. We were young kids, so that always helped.
We’d often build theses around which neighborhoods were more likely to buy. It was usually not the richest neighborhoods — they were all maybe a little too smart. It was somewhere in between. We always looked for signs of children in the backyards of houses.
I always remember one of my good friends — still one of my very good friends today — Fraser. He used to always outsell me. I don’t think there was a day where I outsold him, and I always thought I was a much better salesperson than him when the door opened. But he just did not care about being rejected. He’d go from each house, get yelled at and sworn at, and come out laughing, knocking on the next door within seconds.
I always had to build myself up after getting rejected — which was most of the time — before I could knock on another door. It kind of taught me the power of persistence. You keep going, and if you have that level of grit and perseverance, your chances of winning, your chances of success, are much higher. So I was certainly learning that at a very young age.
Going to China: The Plan (Such as It Was) [00:06:00]
Nick: From there, Matt went to university as well, and then dropped that after a year to set up and develop the hot air balloon into something a little more professional. Matt said, “Why don’t we explore going to India or China to manufacture?” Given I was making them, I thought that was a great idea.
Matt went off to India and China, did a little scouting trip, came back and said, “China — let’s go to China.” And by “let’s go to China,” he meant: you go to China.
So I tapped up the most entrepreneurial guy from my first year at university — a guy called Joe — dragged Joe to China. We had no money, really no contacts. We went to a little place called Shantou, which was the middle of nowhere. There were no other Westerners.
We had an apartment — I think it was probably the equivalent of $8 a month to rent. It was on the eighth floor with no lift. So whenever you were thirsty and had to get water, you had to walk down eight flights of stairs and come back up. That’s where we started.
Sam: The story I had heard was you guys like, first night, slept in a bush. What happened there? What was the plan — were you just going to go try to find a manufacturer, walk around? What were you thinking?
Nick: We were so naive. On reflection, I look back and it’s almost like we built a toy company from first principles, because we did everything differently from everyone else without even knowing it.
We didn’t know that you could go and contract-manufacture your product. We were planning on setting up our own little factory — and that’s essentially what we did.
Me and Joe got into some trouble and Joe had to fly home to New Zealand, so my brother came over. We ended up trying to get a hotel, but everything was way too expensive. So we decided to just sleep in the bushes at Hong Kong airport. I remember getting completely attacked by mosquitoes all night. We didn’t want to sleep in the airport because the lights on the floor were so bright. So we ended up sleeping in the bushes and getting attacked by mosquitoes all night. It was not fun.
Then we made it up to China and set up a little factory on the side of a river — a small shed, more or less. My cousin Simon came up at that time as well, as an engineer. He welded a production line. We bought — we pretty much spent all the money we had on an injection molding machine. We employed a few people on the production line. We had a little old lady who used to cook for us every day; I think the budget was 2 RMB per meal, which was about 30 cents.
We started making our first product, and then we started making our second product — a night frisbee — which we got sued on. And we had no money to defend ourselves.
The Night Frisbee Disaster: New York Toy Fair [00:10:30]
Sam: Stupid question, but why not just go to China and literally build your own factory — literally create a structure on the side of a river and weld it together yourself? Why did you feel like you needed to be in China instead of just doing it where you were?
Nick: We understood that most of the toys in the world were made in China. But when I say we were naive — I feel like that is even an understatement. We were trying to make our hot air balloon, but we didn’t even realize that we couldn’t sell it to any toy chains or large retailers around the world because it didn’t meet any of the regulatory standards. I mean, it had a burning can under it. So we were super naive.
Then we started looking up products that we could make in our little factory. We saw this company in America making a light-up frisbee with LEDs that could be thrown at night. We thought, “Oh, that’s cool.” So we made this night frisbee in our factory.
I started hustling to sell it — I would email every buyer in the world, every major retailer in every country I possibly could. I sold it to a distributor called Schilling in the US. We spent what was a lot of money at the time. I went to New York Toy Fair. We also made this other product — or copied this other product — called a Money Gobbler, which was a money bank in the shape of an animal where you’d feed coins into its mouth, it would go down the throat into the stomach.
So I go to New York Toy Fair, on their booth, to start selling these two products. And this guy comes flying onto the booth, yelling. He’s obviously got wind that we made a product identical to his, and he had multiple patents for how the LED connected to the fiber optic and how the whole thing worked.
Dave — the owner of the distributorship — comes up to me and says, “We need to pull that frisbee off the booth.” This is probably an hour into New York Toy Show starting. I’m pretty disappointed, but I’m like, “Okay, I’ll sell the Money Gobbler.”
About three hours later, this lady comes up — she’d built a whole business over 25 years making these money animal banks, big booth on the ground floor of Javits Center. She comes screaming onto the booth, yelling and swearing. Dave wanders over to me sheepishly and says, “You need to take the Money Gobbler off the booth as well.”
So within the first morning of New York Toy Fair, both our products have been taken off the distributor’s booth. I flew back to China. I said to my brother, “Have you ever heard of this IP thing? This patent thing? I think we need to start innovating and coming up with our own ideas.”
Then we ended up getting into a lawsuit on the night frisbee. They sued us. We had no money to defend ourselves. I remember going to Colorado — that’s where they sued us — trying to find a law firm. Every firm I went to said it would be a million or two million dollars. We had like maybe a few thousand between us.
I ended up convincing a lawyer — his name was Chad, he later got disbarred — that we would write the whole suit and he just had to put his name to it. So Chad did the whole case for us, but didn’t really do it. We learned how to become lawyers ourselves and did it incredibly cheaply. He did end up getting disbarred later on, but that was our only way because, again, we had no money.
Getting the First Real Order: Kohl’s [00:15:00]
Nick: I remember selling the night frisbee to the department store chain Kohl’s — with a K, I know we have Coles down here in Australia with a C. I’ll never forget the buyer’s name — I still work with her today, this is 19 years ago. Her name was Jin S., and she was the buyer at Kohl’s.
I would email her every single day. One day I got an email reply from her — all in capitals. It said, “Nick, I do not have time for your daily email communication. Please stop emailing me every single day.” And I always wrote back, “Oh, so sorry, but I just think our product is really great.”
At this stage we knew we were in a little legal trouble, but we had to sell something to survive. So I kept pushing and pushing.
Then eventually I get this email back from her — just two words. Something like: “Send the sample.” So we sent the sample. She ends up ordering a full container — I think it was 20,000 units of this night frisbee. Big celebration. We’d never had a full container order of any product.
So we ship this full container of night frisbees. And of course she gets enjoined in the lawsuit as well and didn’t speak to me again for a long time.
The irony is today she’s the director of Family Dollar stores in the US, and we’re their second biggest toy supplier after Barbie. So we’ve bonded over it, but we have so many of these stories. That’s just one of many, many in those early days.
The McCroque Diet: Surviving on Less Than a Dollar a Day [00:17:30]
Sam: I have two things. One — let’s do a detour to the dollar-a-day thing, because my guy Diego who helps me with research goes, “You’ve got to ask him about the McDonald’s broke diet.” He said apparently you were just eating off the dollar menu at McDonald’s in China every day and had some trick about the french fries to get free ones. What is the McDonald’s broke diet?
Nick: As far as it was — we didn’t eat McDonald’s. McDonald’s was a treat. So me and Matt were in China, and for Christmas we would celebrate by going to McDonald’s. I think my brother didn’t come back to New Zealand for eight years. He lived in a factory for ten years — had a tiny little room in a factory for ten years, which is crazy in itself.
For Christmas, we would celebrate by going to McDonald’s. A combo was probably the equivalent of about $2.50 in China at that time — that’s how frugal we were. We wouldn’t even go to McDonald’s normally. But we’d go celebrate Christmas and I always remember going, “Merry Christmas, bro.” “Merry Christmas, bro.” Finally eating some good food.
I always played a trick to get extra fries: I’d eat half of them and then take them up to the counter and say, “Hey, you only filled my fries half full,” and they’d give me another one. So I could get more for free.
We were so frugal. When we’d go on the train, we’d use a concessionary or children’s pass and hope we wouldn’t get caught, because it was half the price. We’d be saving like a dollar on a fare that was maybe twelve RMB or a couple dollars. And we did that for years.
Sam: What was driving this? New Zealand’s a beautiful place — you could have had a comfortable life. I’m a founder, I’ve been a founder, but I didn’t do what you did. I didn’t sleep in a factory on a mat on the floor for eight, ten years. I didn’t live off less than a dollar a day. Were you having so much fun? Did you feel like there was no other choice? What was the mindset that kept you going for so many years just scrapping?
Nick: I reflect back on it and it is a little bit hard to understand, in all honesty. But I think when you’re in it together, you hold each other accountable. You push each other because you don’t want to fail. Me and my brother are equally competitive, and I don’t think you want to let the other person down. So you just keep fighting, because if one of you gave up, you’re kind of admitting defeat.
We also didn’t really have another option. We didn’t understand that there was even such a thing as going and raising money to build a company. I look back at the extreme naivety — I used to write emails to my mom from China, and she was beside herself. I was so young, eighteen. I read those emails now and I understand how little we knew — even about the world, let alone about business. It’s quite scary.
We just thought: we’ll keep fighting, get these little wins, little wins, little wins. We started to get a little bit more momentum. One of my favorite sayings is: you win or you learn — you never lose, you never fail.
Connecting the Dots: Getting to Real Momentum [00:21:00]
Sam: So you’ve painted the picture beautifully of the extreme naive approach, the scrapping. Now connect the dots — fast forward the tape, and you end up with this super successful toy company. Third most profitable toy company in the world, doing over a billion dollars a year in sales. Where did you start to really get momentum? What were the breakthroughs, the epiphanies, the key breaks that got you there?
Nick: There are a few stories. I remember just sitting there every day thinking really big early — just got to get Walmart, just got to get Kmart, just got to get these big retailers.
I remember ringing Walmart every single day because of the time zones — it was late at night. Month after month after month. I always remember all the early buyer names because I just see them in my memory. My brother was basically telling me to give up. “You’re not going to get Walmart.” Eventually the buyer Ryan Hord answered.
I was on the phone with the Walmart buyer from China. We were just in Shantou trying to get off the ground, and he said, “Do you have a showroom in Hong Kong?” I didn’t know what a showroom in Hong Kong was. But of course I said yes. I’ll get back to you with the address.
I started to learn that the toy industry revolved around showrooms in a place called Tsim Sha Tsui in Hong Kong. All the big companies had showrooms there, and all the buyers from around the world congregated in Hong Kong twice a year.
So I got on a train to Hong Kong the next day, found out where these toy companies were, and started knocking on their doors. I said, “I’ll bring the Walmart buyer — if you just give me some space to use and your address, hopefully you can sell your products to them as well.” Every company denied me.
So I thought: okay, we need to rent a showroom. At the time it was a lot of money — I think like $3,000 a month to rent these little glass cubicles in a place called South Sea Centre. We were so poor, but I thought we don’t have an option.
So we rented this tiny cubicle. I found some shelving that someone was throwing out from another showroom, put it inside, bought a table, and had a little roll-up mattress. I slept in the showroom under the table each night because there was nowhere else to sleep. I’d wash in the little bathroom in the lobby of South Sea Centre in the morning.
Sleeping Under the Table: Hong Kong Showroom Life [00:24:30]
Nick: I realized that the buyers come to Hong Kong in January and October every year. Now I have this base to invite people to.
I get Walmart to come in — actually got a guy called Frank Deo from Walmart Canada. I’ll never forget: he came in, and I think he was so shocked that he’d given me a meeting when he saw this two-meter by two-meter showroom. He came with two merchandisers. He went to shake his hand — didn’t shake my hand, didn’t even sit down. Just yelled at me. He reads the quotes I’d filled out wrong and throws them down on the table and walks out.
I’m just in shock. Then I contacted his boss, said, “Hey, I had a really bad experience with Frank.” The boss agreed to meet me again at Walmart’s procurement center. So I said, “Screw this, I’m going to go up and meet him again.” Met him a second time. He ended up ordering about $70,000 of our night ball. Another good example of persistence.
Then one day I had a buyer come in from Australia. I was sleeping under my table. The door was only about a meter from my head because the showroom was so small. The buyer came an hour early and was knocking on the door. I’m lying there looking at her feet under the door thinking: I’m still in bed under my table.
I had to wait for her to go away and then message her afterward, saying, “Oh, I thought you were coming at ten.” She said, “Oh, I thought it was nine.” So I had all sorts of experiences. I used to crash at nearby hotels and post samples under their hotel room doors. But we did whatever it would take.
The David Beckham Tamagotchi: First Big Order (and Disaster) [00:27:00]
Nick: The first big break we got was crazy. I was at a company in the UK called Recreation — they were selling our night sports balls — and I met a guy called Sean on their booth. He’d developed a soccer tamagotchi. It was like a tamagotchi where you trained your player and then through infrared you could play against each other. He had the Manchester United license. It was selling reasonably okay in the UK, but he was having trouble with manufacturing. I was like, “We can make that for you.”
We started talking — David Beckham was moving to the US to play. What if we get the David Beckham license? We went and pitched Simon Fuller, who started American Idol and had the David Beckham rights at the time. They said, “We’ll give you the Beckham license — it’ll cost you a million and a half dollars.” We didn’t have a million and a half.
But then we go to Walmart. The buyer — her name was Danielle Prell, never forget it — she loved David Beckham. He was moving to the US. She was just obsessed. We blew a few bubbles, but Walmart turned around and ordered 2.2 million units of this David Beckham tamagotchi. I think they were like $14.50 a piece — almost $30 million.
Keep in mind we’d never had an order more than $70,000 at this point and our total revenue was in the hundreds of thousands. Suddenly we get this order for almost $30 million in retail value.
We were counting our pennies, super excited. We were making this thing for $3 and selling it for $14.50. But then we were like: oh no, we have to figure out how to make this product. We had our tiny little factory with twenty people in it — there’s no chance we can make 2.2 million units.
Early on in China, I’d been on a tour of a factory with one of the wealthiest guys in Hong Kong — Francis Choy, who owned Blyth Light International. They were the contract manufacturer for Hasbro and Mattel and all the toy companies. I still had the contact with someone from that meeting — a guy called Wilson.
I got a meeting with Wilson. I said, “Hey, we’ve got this huge order — 2.2 million pieces. Can you help us make it?” He said yes. Then I said, “Oh — and by the way, can you also pay for it as well?” He said, “Let me check with Francis.” Francis came back and said, “Yeah, if you transfer the letter of credit to us, we’ll help you pay for it as well.”
Great. We start making it. 2.2 million LCDs, all the components. Then Walmart turns around and cancels — from 2.2 million pieces down to 1.2 million. “No no no, they can’t do that.” But then they canceled all the way down to 300,000 pieces.
I calculated that if I could get the order back to 800,000 pieces, we could still pay Francis off and still make about a million and a half dollars. Eventually I convinced Walmart to get back to 800,000 or 900,000 pieces. We shipped this product — and it was a disaster. It hit the shelf and just sat there. They discounted from $30 to $25, then $20, then $15, then $10, then $5. Nobody bought it. Eventually sold to discount channels for like fifty cents a piece. And of course Walmart came back to us wanting markdown money.
We were determined to keep our little bit of margin and refused to give them money back. We ended up getting blacklisted from Walmart for about five years. It was not until years later that I met Danielle’s boss at New York Toy Fair — a woman called Laura Phillips — and I wrote this big long email of everything that had happened. That’s when we started to work together again.
But as crazy as it was, that story was our first break to actually make a little bit of money.
Distribution Hustle: Taking Other People’s Products Global [00:33:00]
Nick: From there, I started doing deals with US companies that only sold product in the US but didn’t sell internationally. I did these deals to take their products and sell them globally — I’d tell a big story about how I could get their products in everywhere, and then I’d go out and hustle to make it happen.
We had a product called Zibits, which became really successful, and a product called Scrubbles out of Australia that became really successful. So we started taking other people’s products.
Sam: How did you figure out that model? Did you see somebody else doing it? It seems like you weren’t using mentors — you were doing a lot of running around with a fork, sticking it into outlets, trying to figure out which ones were working.
Nick: That’s a great analogy. That’s exactly what we did. Honestly, we were making these products and our second product line was the night balls, but the product was so bad. Matt had a factory by this stage, but the engineering was terrible. The night balls had foam EVA patches glued into a frame, and the production was so hard to execute.
I was actually getting quite a few orders — I was hustling around getting orders. But Matt couldn’t produce them because the production was so hard. I got so mad at him that at one point I went back to China to take over the factory. I learned two words of Chinese: “tai man” — too slow — and “kuai” — faster. I was on the production line pushing to get these balls out the door.
I remember they were coming off the end of the production line half-mangled. I was just like: ship them. Ship the balls. We’ve got to ship them.
Years later you’d see these things on shelves and all the air had gone out of them, all the EVA patches had peeled off, and they were these shriveled-up little prunes.
Sam: I love that you’re honest about it, because so many people say, “All that mattered was product, and we really just built a great product and then everything worked.” I know I’ve been there — the first version of all my products sucked. In fact, the tenth version still kind of sucked. It sounds like you weren’t super innovative, you just saw things working and you were like: cool, we could do lights on a frisbee, lights on a ball, let’s do that. And your product kind of sucked and you were just doing door-to-door sales at a global level. It was distribution and salesmanship keeping you afloat.
Nick: Yeah. We would sell a product to someone and we wouldn’t get a reorder. We didn’t know what a reorder was because the product would sell through and then we’d just sell a new product to a new customer. We didn’t know for probably seven or eight years what a reorder was — when a product actually sold off the shelf and the customer came back to buy more. We could continually hustle to all these different customers.
We did crazy things. We got a distributor in the US called Spin Master — they’re one of the biggest toy companies in the world now. Very similar story to our own: three Canadians, built this toy company. Spin Master had agreed to take our night sports balls for distribution in the US. They said, “We’ll run a test in Cincinnati — put your night balls into all the Walmarts in Cincinnati, run media in that city, then decide whether to roll it out.”
Cincinnati: Stuffing the Test [00:38:00]
Nick: Whether it was dishonest — I think it was more desperation at the time — but I flew to where the test was. I couldn’t get a flight to Cincinnati that wasn’t too expensive. It was summer holidays. I went down to the bus station in New York and got a Greyhound to Cincinnati. I think it took like 30 hours, broke down a bunch of times. Stayed in an absolutely horrific place.
But every day — and yes, this is a little bit dishonest — I would get the bus schedule, take the bus to each Walmart, and give people cash to go buy a ball. I’d go in and buy them on different credit cards myself. I was so paranoid about getting caught, but I just wanted to help our test sales go up a little bit.
It was a long day because the Walmarts were all so far apart and I was taking the bus schedule to get to each one. I stayed there for a month.
I almost got killed in a place called Over-the-Rhine — if you look it up, it was one of the most dangerous neighborhoods in America at the time. I managed to walk down there in the middle of the day. It was the scariest thing in my life. A guy came up to me and said, “What are you doing here, white boy?” I was like, “I’m just a tourist.” Weeks later, walking back from downtown at night, I walked in the wrong direction, ended up there again, and got chased. Had to hide.
But we had a good test. Spin Master rolled the product out. It wasn’t a great product in terms of construction — same problem — but my god did we have to hustle. We had to strap and fight so hard just to survive.
The Profitability Commitment [00:41:00]
Nick: We got to a point where we were selling enough — each new customer, each new product. We weren’t getting reorders but we were profitable.
After the David Beckham thing, we made like that million and a half dollars or whatever it was. We got a little fat and happy. Then we had a month where we lost $200,000. I remember we sat down and said: from this day on, we will never have a day, a month, a week, a year where we lose money. If we’re losing money in a month, we’ll sit down, we’ll eat nothing, we’ll cut people, we’ll live on nothing — just to ensure we’re profitable.
People wonder how we got to a few billion dollars a year in sales having built it completely organically. The truth is we were so frugal and we kept building and getting more and more profitable every year for twenty years. It was almost this cognitive process: how do we remain profitable? That just compounded over twenty years.
We’ve gotten more and more profitable to the point where we run at about 40% net profit, which is unheard of in any industry — let alone in the products industry, let alone in software.
We built something from first principles. The way we set up factories, the way we now automate all of our production, the way we don’t do domestic shipping — we do all FOB. The way we centralize all of our content and data systems for marketing globally. We built this company from a first-principles approach, and we did it more through naivety than through planning.
Sam: You started at around eighteen years old when you went to China. Do you remember how many years it took to get to where you made $100,000, or a million dollars?
Nick: It was probably a couple of years before we started to make money. But we still lived the same way because we needed that money to fund our growth. You can’t grow to billions of dollars a year in sales organically without going to a bank unless you’re super profitable to keep funding that growth.
So we started to make money, but we never spent it. I still lived in a dorm room in Hong Kong. For probably eight years. Matt, as we slowly built bigger factories, would always have a tiny little room in the factory — that’s where he lived in China, with no real interaction with anyone else.
Finding Genuine Innovation: Robo Fish [00:44:30]
Sam: At some point you start figuring out toys that are new, novel, genuinely good products — I’ve bought your water balloon products, where you can fill up like 100 or 500 water balloons at once in about fifteen seconds. You eventually start making good products. How did that happen?
Nick: It was on a parallel path. We were taking other people’s products, and that was helping us really open up distribution. At the same time, we were starting to learn how to make better products ourselves. We were building a team in China — engineers, some designers — and starting to parallel-path building our own products.
I think our big break after Zibits came when we did Robo Fish. We still sell about eight million of them a year today. A Chinese inventor and I met a French guy in Hong Kong who was brokering some inventions. He showed me this Robo Fish. I didn’t think too much of it at first, but then he showed my brother, and my brother loved it.
Part of the deal was we had to make it in their factory if we licensed it. So we licensed this fish. It had little carbon sinks, a very clever design with an electromagnetic coil — it touches water, it’s all micro, and it swims and looks like a real fish. Water activated. We started making this fish.
Then the guy who invented it had previously worked at a US company that had said no to the invention — and a release had been signed saying no problem, you can go sell it to anyone else. Of course Robo Fish blew up, became one of the best-selling toys in the world, and then he decided that the inventor had designed some schematics while under employment. The drawings were still on the company’s computer systems. So we were in this long, long lawsuit.
Even worse: we finally had a product — it was like the number one selling in lots of countries, took us to something like $100 million. A big break. But the factory that we were bound to make it with went bankrupt in the middle of production.
We had built so much specialist production — not just the tools but all the specialized testing equipment. Each fish was tested underwater for pressure. There was just a ton of specialized equipment that had been built to produce Robo Fish.
The whole factory gets shut down. Chinese law means the factory workers are the first creditors, so they send the army in to stop any assets being taken out of the factory. We’re at peak Robo Fish production, peak demand. Retailers who wouldn’t talk to me for seven years were suddenly calling — “Hey, yeah, that Robo Fish.” But we couldn’t get into the factory.
Midnight Truck Raid on the Bankrupt Factory [00:49:00]
Nick: We had no other option. We had to get our tooling, all our equipment, everything out of that factory and relocate it.
So in the middle of the night, my brother got eight trucks, got all our team from one of our little factories, filled these trucks with people. At like 2:00, 3:00 in the morning, when there were fewer people camped out at the factory, he pulled up, paid a bunch of bribes to get in, took all the trucks into the factory, all our people went in, picked up all the tooling and all the equipment, loaded up all the trucks in the middle of the night, and relocated to a new factory so we could continue production.
It was crazy. Nothing ever happens without a hiccup. We finally felt like we had momentum — and then this. But we got through it.
Current State: How Big Is the Empire? [00:50:30]
Sam: How old are you now?
Nick: Thirty-nine.
Sam: Thirty-nine. Do you still go as hard? Are you still as nuts as the early version of you — still have the same drive?
Nick: We still have it. I think we’re just as motivated today, if not more motivated, than we’ve ever been. We see a pretty cool roadmap ahead of where we want to get to in the next ten years.
Sam: So let’s talk about that. Can you just summarize — how big is the empire today?
Nick: Little over two billion US in revenue. We’re growing about 25 to 30% year on year. But the thing with us is, our revenue is one thing — it’s just how profitably we’ve built the business.
Sam: Not a public company. Privately held. Super profitable toy company. Like basically a billion dollars a year of profit out of the toy business. But then you have this diaper company. You started buying other companies, right?
Getting Sick, Coming Home, and Seeing the FMCG Opportunity [00:52:00]
Nick: Not so much buying. I actually got sick. I got sick in China and Hong Kong — had to have my large intestine removed. This probably has something to do with living in China for all those years and eating incredibly poorly, but I’m not sure. I had to move home to New Zealand to get surgery, about six years ago.
It ended up being a great thing. I came home for the surgery, was meant to rest for a while. I was sitting at home getting restless, trying to rest with my large bowel removed. A friend had started a small DTC business and was doing like fifty grand a year at DTC in New Zealand — really really small. He’d been meeting with me for three years. I thought, well, I might as well help.
I’d always thought about toys as an industry where there’s really a ceiling to the size of the business you can grow, just because of the addressable market. You’ve also got brands like Hot Wheels that are super hard to disrupt. I was looking at FMCG.
I started to realize that there are like nine companies that dominate eighty percent of FMCG globally. When you build a toy business, you work in every material form. Speed of innovation is your DNA — you build this muscle for speed, for working fast. Because you reinvent forty to fifty percent of your entire product line every single year.
But because you’re turning over so much of your product line every year, it becomes really hard to keep growing. You have to reinvent to catch up every year.
So I formed this thesis about six years ago: we’re so good at automating, and I would classify ZURU today as more of an automation company than anything else. The products are almost secondary. We build incredibly sophisticated automation — whether that’s building a house on a production line with robots, or a dart blaster with robots.
I thought these big FMCG companies: one, they don’t innovate; two, there are a lot of duopolies. If you look at pet food, it’s Mars and Nestlé. Baby: Kimberly-Clark and Procter & Gamble. Beauty: L’Oréal and Procter & Gamble. Laundry: pretty much just P&G and Tide. All these duopolies and monopolies across the board, and through that they were delivering less margin to their retail partners.
I remember mapping out Walmart’s revenue against the top eight FMCG companies. Walmart does more revenue than all of them combined — $611 billion. But Walmart makes only a fraction of the profit. The big FMCG companies make the lion’s share, about 75% of the profits.
So I thought: is there a world in which we can be disruptive in FMCG? Can we deliver more margin to our retail partners? Can we innovate faster? Can we bring our speed-of-innovation mindset to these categories and reach customers in a far more efficient way?
Launching the Diaper Brand: Testing in New Zealand [00:56:30]
Nick: I started with baby. You have a mom who’s an incredibly targeted audience — how can you serve her every single day in a targeted way rather than just buying mass media? And what if we build a better product, deliver more margin, and position it at a better price?
I worked with my friend and said, “Let’s launch this diaper brand in New Zealand as a test market.” Within one year, I think we were taking 40% market share in New Zealand just by launching a diaper.
I remember meeting Greg Foran — who was CEO of Walmart at the time, and a New Zealander — and saying, “We’re going to take on diapers.” He turned to me and said, “Nick, ever heard of Coke and Pepsi? Pampers and Huggies are going to be that hard to crack.” I said, “I get you, but I think we can do this.”
So we launched in New Zealand. The second biggest brand in New Zealand was Treasures. Their share just plummeted. They ended up going out of business and having to sell the brand for pennies on the dollar.
Sam: And you’re spending a ton on Facebook ads or what are you doing?
Nick: Facebook, and then it progressed to Instagram, now it’s progressed to TikTok. You’ve got to move at the speed of platforms, but you’ve also got to move at the speed of culture.
For toys, YouTube was the main thing that replaced TV advertising. Today we don’t spend any money on TV in toys — it’s all YouTube, TikTok, YouTube Shorts. The platforms change, but the logic is the same.
I packaged up the New Zealand case study and went to Australia, went to Coles. “Look at what we achieved in New Zealand. Look at all the margin we’re delivering. Look at the category share we’re driving.” Coles were like, “Love it.” Same thing — we won Coles Non-Food Supplier of the Year award in the first year.
Took that model to the US, went to Walmart. They gave us a Dallas test. Same thing. We became last year Walmart’s fastest-growing brand across all categories with Rascals.
We did the same at Target with our brand Milly Moon. Milly Moon actually just overtook private label and Huggies as the second biggest sub-brand in Target in under about three and a half years — which is incredible.
Last year we produced two billion diapers. All in about five and a half years. Well over a billion dollars of retail sales last year in diapers. Five years from start to over a billion dollars a year.
Monday Haircare and the FMCG Portfolio [01:01:00]
Nick: I started testing in New Zealand and losing. We tried infant formula — didn’t work. Tried foot care — failed. Tried oat milk — failed. I did all these horrible things.
But my partner at the time, Jamie, had a background in luxury PR and beauty. She said, “Don’t do that — let’s start a beauty brand.” We started Monday Haircare — the little pink bottle. Forbes called it last year the most famous shampoo and conditioner bottle in the world.
We launched that. In Australia, I think we won product launch of the year, had five of the top ten in total hair care, overtook Pantene in sales.
Sam: What do you think is the difference between the ones that worked and the ones that didn’t? Is it category? Was some categories just more ripe? Is it packaging and positioning?
Nick: Diapers is driven by price and performance. We were the first in the world to take a China diaper to the world — and China is making the best diapers in the world. There are like a thousand domestic brands in China, all competing on nonwovens, substrates, SAP, machine technology. All of that has advanced so fast because of the domestic competition.
So it’s either: you’re in a price-and-performance-driven category — be the best price and performance — or you’re Innovation-driven — like our Dummy Yum product, which was super innovative. Or it’s design and creative, like Monday. It’s still a bottle of shampoo, but incredible design and creative. We owned TikTok. Monday is the number one haircare brand in the world on TikTok by a long way.
Last year in the US, Monday was second only in total growth in haircare to Procter & Gamble’s entire haircare portfolio. Just the Monday brand.
So I started to learn which categories would work for us. We went super deep in those categories and applied the same model — build all the factories, automate everything.
In beauty, we built the whole factory: injection molding, rotor molding, filling, mixing — all of that under one roof. We built all the lab in Shanghai. Got L’Oréal formulation specialists over.
In pet food: I hired a young guy called Alistair who won a high school entrepreneurial program. One of our brands, Bonkers, drove 30% of all cat treat growth in America last year.
We experimented in supplements — a little hard. Built a brand with the Kardashians called Dose & Co., ended up selling it last year. Worked everywhere in the world, failed in the US.
The Five Verticals and Why Not Just Stop [01:06:30]
Nick: So we’ve built what I call our five-vertical strategy: toys, diapers, beauty, pet food, home care. Going very deep within all of them. I think all of them individually can be bigger than our toy company within two or three years.
Sam: What’s the dream? Why go so hard? Why do so many? You could just coast on the toy company, sit on a boat, looking at an island you own. Is it the love of the game? You want to be a hundred-billionaire? What’s driving this?
Nick: I think we love it, number one. Love having a thesis, love competing. For me it’s sport. Having a thesis, going into something, working it out. As you become more successful you think: how can I solve bigger problems? We’re almost in a privileged position now — how do we go on and actually solve bigger problems?
That’s why we’ve been building ZURU Tech over the last eight or nine years.
ZURU Tech: Building Houses in a Factory [01:08:00]
Sam: Can you explain what that is? I think you have — or are building — the largest factory in the world, period. What is ZURU Tech?
Nick: The thesis was: if you look at the construction industry, it’s been done the same way for hundreds of years. It’s also the biggest segment in the world — construction and property development.
The idea: how do we build the first factory in the world with a customized input — the design of a building — and a fully automated output? How do we build buildings for a fraction of today’s cost?
We built our software, called DreamCatcher, which is built on Unreal Engine. Incredibly simple UI, but the logic layer below is incredibly complex. We’ve cataloged every building code in the world. You can drop a pin anywhere on the planet, it maps the terrain, it does the building code, and then you can design your house or building in DreamCatcher.
We’ve also built our own AI assistant on our own large language model called Quira — training our model on all the great architects. You can talk to your building and it builds in front of you. Put a 2D plan in, decide, “This room — I want it to be Stockholm style” — and it maps all the furniture and does it for you.
The software does all the structural side, all the mechanical, electrical, plumbing, in a super intelligent way. Wherever you’ve dropped the pin, it works out the building’s orientation for the sun, how many HVAC units you need, how many solar panels. Then the software translates every part into our factory, which builds every single part — completely automated, from design to delivery.
Factory Scale and the Path to Commercial Production [01:11:30]
Nick: Originally we built a one-tenth scale factory to test the software with the hardware — how they all integrate together. That builds these mini houses that are one-tenth of every dimension. Once we had that working, we built roughly a three-hectare factory as a test production line. That’s producing at full scale right now — we’re building a house about every two weeks, testing, making like a hundred little changes, going back and updating the software.
Then we bought a building that’s 25 acres in size — our first commercial factory for producing houses. In phase four, we’ll be building one of the biggest factories in the world — I think 60 to 70 Boeing-equivalent in size. So that’s all planned out.
We’re building a house for $500 a square meter. Best quality — irrigated concrete, ceramic tile. We’ve innovated every single part of the process: the wall module, the tile module, the window module, the lighting module, the smart home module. Every team is what I think is the best in the world at what they’re doing.
It’s a huge project. About 700 software and hardware engineers working on it. And we’re self-funding — we didn’t raise money for this.
We’re getting very close to a final product. We think we’re five test houses away from getting it very close to perfect, and then it should be transformational in terms of how the world builds.
Anyone can use DreamCatcher. You could go on and there might be a million different two-bedroom houses designed by people on the platform. Look through them, put a price on selling your own design. Go through them in real time, stage furniture. We’ll have a marketplace — Ikea could digitally scan all their furniture in, artists could scan their art in, you can put it in your house and walk around in real time.
Sam: This is insanely cool. It’s like if you go to the website it looks like you’re looking at the Sims — you can zoom around the house, move things around. But you’re saying there’s basically a button where you click “print” and then the house gets built in an automated factory. Mind-blowing. How much are you putting into this? Are you putting in hundreds of millions of dollars?
Nick: It’s a lot, for sure. We have three software offices in India — Pune, Kolkata, and Hyderabad — and two in Italy: Milan and Monza. The reason Italy is because years ago we acquired a company — two guys, Martin and Aliso, PB Architects — who decided that architectural software was built on incredibly old software stacks and that gaming engines were where the future was going. So they decided to build architectural software on Unreal Engine. We acquired them. I think we have about 160 people sitting in Italy on the software side. Then China for all the hardware and automation development.
Our automation team is growing in parallel. We produce 57 million dart and water blasters a year — a dart blaster from a plastic granule through to a finished product with no people. Our competitors like Hasbro outsource to factories that still drill on production lines. We’re now building Automation 2.0 with vision and machine learning — we can actually change out any model of blaster on the same production line, it can see the mold and shape and all the screw holes, and it adapts completely.
The big difference is: when you automate toys or FMCG, you’re making the same product over and over with robots. This is incredibly complex because you’re building a tailored product for every building site in the world, every building code, and it’s different every time. Having that fully automated output with a fully customized input has never really been done before.
Elon Musk and the Idiot Index [01:18:00]
Sam: Dude, you are a madman. Who are your peers? Who do you relate to? Do you just read Elon Musk biographies and think that’s the only other guy in the world you have something in common with? Is that somebody you admire?
Nick: Huge admiration for Elon. We’ve been big Tesla fans and backers for a very long time. I actually had a chance to meet him, and then had to fly home for an emergency, so I actually don’t know him.
My brother is very similar in his way of thinking. He was the driver behind ZURU Tech. Elon calls it the “idiot index.” When you look at the cost of a rocket versus the cost of the raw materials — it’s like hundreds of times the cost of materials to build a rocket. He takes a first-principles approach, breaks it down, works out how to build a rocket at a price that makes sense based on the cost of the raw materials.
We’re taking a similar approach to how we build a building — whether it’s one story or a hundred stories. Look at the cost of materials out of the ground and look at the final cost of the building. The idiot index is really high. Same or similar type of thinking.
Sam: Did you see — I think yesterday or two days ago — Boom Supersonic did their first supersonic flight? He had a kind of similar story where he worked at Groupon, was a product manager selling coupons on the internet, and then just for fun had a hobby of flying. He gave himself a year to understand from first principles how planes work and figure out if there was some business he could build around it. And while he was building his spreadsheet, he was like: I don’t get it. There’s no reason we shouldn’t be flying at supersonic speeds right now. He took it to professors and they said: there’s no theoretical errors in your calculations — it’s just a courage problem, not a materials problem. An entrepreneurship problem. And seeing that go from first principles to doing their first supersonic flight yesterday was super inspiring.
Nick: Incredible.
Hobbies, Family, and What’s Next [01:21:00]
Sam: You’re doing all this stuff. Do you have hobbies? Do you do stuff outside of work? Is this just sport for you?
Nick: Definitely sport. We love competing. So anything that has a competition element — tennis, golf, just sport in general. That’s something I get a lot of enjoyment out of.
As you get older, obviously we don’t have that pit in your stomach every morning anymore, wondering what’s going to go wrong today. And we definitely get to spend more time with family. I finally had my first child last year.
Sam: Congrats.
Nick: Thanks. It definitely changes your perspective on things, which has been really good. I always sort of kicked that can down the road, delayed it as long as possible, thought it would slow me down. But it’s definitely been one of the best things.
How to Build New Companies: Boots on the Ground [01:22:30]
Sam: When you start these new companies, I always find this interesting with serial entrepreneurs. Some people take a sabbatical for a year to figure out the next thing. Some devote a percentage of their time to new ideas and are super hands-on. Others recruit an operator, give them the idea, and act as more of a chairman from afar. When you did the diaper brand and the others — were you boots on the ground every day figuring it out, or did you do the operator model?
Nick: Definitely boots on the ground. But what I would say is: in our business, there’s a through line through it all. We’re essentially making a product — whether it’s a house, a bottle of shampoo, a laundry pod, or a dart blaster. It’s still: make the best product in the world, build factories, sell it into retail.
We’ve built such a big flywheel. Our China office has three and a half thousand people. It just becomes easier and easier to plug into that flywheel regardless of the category. Yes, they’re all different industries, but we’re still effectively trying to make the best product in the world at the best price.
We set ourselves the goal of making a product that costs zero. I know that’s impossible, but that’s our goal — how do we make it to zero cost and make it the best in the world? There’s a through line through it all.
I believe leadership has to be on the dance floor, has to have their hands dirty — that’s where you get the most insights.
The Bullet and Cannonball Framework [01:25:00]
Nick: In our business now, I’m a huge believer in firing bullets and failing fast. I always say: get an actionable insight. Where’s an insight? Find an insight somewhere in the world. An insight forms a bullet. A bullet is a minimal viable investment in testing something. And then if the bullet works, it’s a cannonball — we invest and we build the recipe around that.
Once the recipe is working, you can pull a lot more things into that recipe and build it out. So our mindset around fast fail — we actually have what we call “Fast Starts” now in FMCG. We’re trying to build minimal viable products to test as quickly as possible. Speed of innovation is probably the biggest thing for us.
We also have a mindset around continuous improvement. We call it 2% improvement a week. The power of compounding. I know 2% improvement a week is nothing you can measure, but that’s the mindset — what we put into our DNA. We always say to the team: “We suck now compared to where we’ll be in the future.” We have this relentless mindset of looking back on ourselves a year ago and thinking: we weren’t even good then. That compounding improvement is a huge part of what we do.
Hiring for Grit Density [01:27:00]
Nick: When I look at team members, people say they’re trying to build talent density. Yes, we try to build talent density, but for us we’re trying to build grit density. When we hire, we’re looking for grit, smarts, and a bias for action — real doers. People who just fast fail, go in and do it, are winners, learn. If it doesn’t work, we’re getting heaps of insights on how to improve next time.
Our mindset and DNA in the business works across any of those verticals. The same approach.
Sam: If you were interviewing me, how would you figure out if I have any grit?
Nick: Looking back at your history is pretty telling. We often find people who were great competitive athletes — people who really love to win. I want to understand how competitive you are and how much you really want something.
We’ve built a “loop” process in our business, similar to the Amazon Loop. Half the hiring is whether you fit and can do the job; the other half is really: do you align to our DNA? We have eight people interview a candidate, and half of those eight are interviewing purely on questions around our DNA — going deep on whether that person fits.
We’re trying to build not just talent density, but grit density. All our best people have incredible grit and an incredible bias for action. They’re smart, but they just get things done. We decide something in a meeting and they’re already actioning it in that very moment. That’s our culture.
Sam: It’s that saying as well: lazy people work a little bit and expect to be winning, whereas winners work as hard as they possibly can and worry that they’re being too lazy. People who work hard are always worrying they’re not doing enough — and those are the people you want.
Nick: Elon has a good question he uses in interviews. He just sits down and says, “Tell me about the hardest problem you’ve ever solved and how you did it.” You can get so much from one question — the scope and the trust they had in prior roles, whether they were nibbling on tiny little issues or actually biting into really meaty things. And whether they can talk about the details, the paths that didn’t work, the paths that did — because that’s the person who was actually doing the work. There’s so much resume lying where somebody says, “Yeah, we did this.” Cool, tell me how. They don’t know, because they weren’t the one doing it.
Sam: Correct. Correct.
Wrap [01:30:30]
Sam: Nick, this was awesome, man. I really appreciate you coming on. You don’t do a lot of podcasts, but your story is honestly incredible. I think as much as you’re building in the factories, doing a podcast like this can build ten thousand new entrepreneurs with more grit, more resilience, just by sharing the story — because you’re showing what’s possible, what you did, how it all turned out, and how you approached it. A simple hour like this can do a lot for a lot of people. So I really thank you for doing it.
Nick: It was a lot of fun. I don’t often share our story, but I totally agree — if it can help inspire people, it’s worth it. It’s not really how capable you are, it’s how willing you are. The willing people, who stick at it for a long, consistent period of time and continually improve — they’re actually the most successful. It’s not necessarily about how smart you are. It really is just grit and perseverance. You end up getting there. That’s the big lesson for any entrepreneur out there.
Sam: Right on. All right, thank you so much. That’s a wrap.