How Ignorance Helped Ugg Boots Become A Multimillion-Dollar Company

Laura Bittner/flickrNow a multimillion-dollar company, Ugg started with a small $200 investment.

When starting a new business, you probably think you'd want to know everything. But as it turns out, ignorance can actually be beneficial.

According to Brian Smith, founder of Ugg Australia and author of "The Birth Of A Brand," a healthy dose of ignorance is the key to becoming a successful entrepreneur and building a big brand.

At Ugg's genesis in 1979, Smith knew virtually nothing about running a business. With a mere $200, he was able to order six sample pairs of Uggs, which he presented at a convention in New York. However, no one saw the boots catching on and he walked away without selling a single pair.

Yet a blissfully ignorant Smith still had faith in the success of the idea. "We didn't care we still hadn't made a single sale, we were too enthused with how rich we would be," he explained at the 2014 Small Business Summit in New York last month.

Smith quickly realized that Americans saw sheepskin as a delicate, fragile material and were afraid to wear them in rain and snow the way Australians would, making the concept a hard sell at first. Still, Smith kept persevering, selling the boots door to door at California surf shops and out of the back of a van during surfing competitions.

Debby/flickrUggs were a hard sell at first, as many Americans believed they were too delicate for snow and rain.

Uggs finally caught on with a mainstream audience, but Smith then discovered that they're a seasonal product, and only turned a profit in the winter. Still, he kept at it, working odd jobs through the summer and concentrating on Uggs when the weather cooled.

But when looking back on the brand's early years, Smith believes his initial ignorance to these issues is what kept him motivated. "Had I known about all these barriers and roadblocks, I would have given up," he tells Business Insider. "But the ignorance is what made it happen. If I didn't have that ignorance, you wouldn't know about Ugg today."

While it's important to be prepared before jumping into a new business, Smith's blind faith in Uggs forced him to find a way to make it work no matter what. Had Smith let the fear of running a seasonal business keep him from starting, he would have missed out on building a multimillion-dollar company.

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