Adam Callinan: From Shark Tank to Serving E-Commerce Businesses

My next chapter has to be built around giving back and helping other people accomplish problems that I had to learn the hard way. That is literally the thesis for this company. So how do we do that? We take in their expense, their ads data, and the revenue data, and we apply a bunch of math to it. And we answer those questions in a dashboard and in a profitability tool. The purpose of the system is to help them get to break even. And beyond that, if they're already profitable, if they're generating a 3% net margin, how do they get to a 10? This answers those question.

Welcome back to the Honest Marketing Podcast, where you learn proven strategies to grow your business without selling your soul. I'm your host, Travis Albritton, and today I had the privilege of sitting down with Adam Callanan, the founder of Pentane, formerly a bottle keeper, to talk about his journey as an entrepreneur. Going from a physical goods business, B2C Distributing, crowdfunded an appearance on Shark Tank. So I peppered him with lots of questions about that experience and how that moved the needle in his business. And then also we talked a lot about his progression into what he's building, which is a SaaS platform for E commerce founders and owners that want to increase the profitability in their business. And so we talk about marketing, we talk about product positioning, we talk about strategy and how to make sure that you're set up for success as an entrepreneur. Then he shares some personal anecdotes and stories that I think you'll really enjoy as well. So make sure you listen to the whole episode. The whole interview is really fantastic. And then I'll, as always, share my number one takeaway at the very end. But here it is, my conversation with Adam. Let's dive in. Well, Adam, welcome to the Honest Marketing Podcast. Super pumped to have you here today.

Thanks for having me, Travis.

So there's a lot of really cool stuff I want to get into. You have an eclectic background. Pretty typical for an entrepreneur nowadays, but I want to start with Bottle Keeper. So this was the company before the one you're currently working on. I would love to hear kind of the origin story of where the product concept came from and why you decided, hey, let's try and make a business out of this.

Sure. The. The product concept itself came from my cousin Matt, who was. We're super close. He was the best man in my wedding. Before all that stuff happened. He was sitting on the beach in Southern California, drinking a beer out of a red party cup. And he is. He's going to send him this and he'll love this. He's a maniac. He's that like maniacal guy that has to drink a Corona out of a bottle at a specific temperature. And if he can't, it like makes him crazy. So he's looking around and seeing, you know, he sees people drinking out of water bottles and he's drinking this warm beer out of a red party cup and, and just has the idea of, why can't I put a beer bottle inside of one of those? And I mean, that was the literal genesis. He went to the store and bought a single walled, just like stainless steel water bottle Vice gripped it to a table, hacksawed it in half and stuffed it with some kind of college era neoprene koozie super glued it in and his Corona fit and it fit perfectly. And the beer bottle stuck out of the top, you know, three quarters of an inch, enough to get your mouth on it without having to touch metal. And that was the quite literal genesis of bottle keeper concept. But it, the timing of that was unique for us. I had just sold out of a medical company. This was in May of 2013. And so I was now looking for the next thing to do. I went and fumbled around with like, venture fund stuff, which is a terrible idea because I'm awful at raising money because I don't like doing it, which I'm sure we'll get into later on. But, um. And so Matt started asking me to get involved and I, I thought it was an interesting idea, but I was not remotely convinced that people would actually pay money for this thing. I just wasn't. And, you know, over the course of months of badgering and badgering, I agreed to come on, you know, as a partner, as long as we could try to build the business in a way that it did not require employees. And that was a very, very intentional guardrail because the company before that was, you know, 80 people in multiple states and delivery vehicles and warehouses and just stuff. It was really difficult to manage. It was hard to get away from. Certainly could have been done better, but learning from that and being fresh out of that, I didn't want to do that again. I wanted to do the opposite. So we, you know, I put up a landing page, I shot a video on a GoPro on the beach with just kind of the product in action and put up a landing page and spent 500 bucks on Google AdWords to send people to the site and just see if we could collect emails. And it was, this was just sort of an initial proof of concept to see if we could get people to that weren't our aunts and uncles interested in what the product was. And it, and it worked like, you know, it wasn't a 12% conversion rate, but it was 2%. It was something that was, it was enough to say, okay, maybe there's something here. But I was still not convinced that we were going to get people to pay real money for it, you know, more than a $5 kind of chachki gift at Spencer's. And so we went to the next phase, which was critical in a really helpful way to prove a concept like this. We went to crowdfunding and it wasn't an expensive company to start. We self funded out, I think each, each of us put in ten grand was the entirety of what we had to put into the company. And this was after it was proven out. But I wanted to prove that we could get complete strangers to put in their credit card information and click buy at a real price point. And so we, we did that. We ended up on Fundable. I knew the guy that owned Fundable and we got kicked off of Kickstarter because it wasn't an art project and they were focused on art projects at that time. And it worked really well. We did something like 3% of our goal and sold a thousand units to strangers all over the country. Actually, there were a couple of other countries that we sold them into as well. So it, it was, it just kind of kept happening and proving my thoughts around what the product is and could be completely wrong. So that was in, that was in fall of 2013. We shipped that first product the first week of January. Of course, we missed Christmas by 10 days, which was awesome. And the company sort of fumbled along as we tried to figure out how to acquire customers. I mean, when you're trying to build a business where you're the only person, or in our case, two people in it, you have to do 100% of everything. And for me, I am a science nerd and I like puzzles and so I like figuring those things out. That's part of who I am. And we just had to figure it out. We put up a little bit of a Chinese wall and split the company in half where Matt was responsible for more of the finance, operational, inventory, manuf stuff. And I was responsible for everything that a consumer would see. So the website, the branding, the voice, the images, the paid media, Facebook, all that stuff. And later that summer of 2014, we got lucky. And what happened was Facebook launched their video ad platform in about August and We finally got to put some dollars behind showing a consumer how this product worked in action. Because we see water bottle, we think water bottle. You really needed to see bottle keeper moving. And being able to use video ads on Facebook changed everything. I mean, went from 2 or $3,000 a month fumbling around to 40 to 80 to 120 to 200. We sold out a product, you know, in the middle of December, and then that happened consistently for the subsequent three years.

So there's a couple of things that I love about that story. The first one is approaching a new business opportunity with healthy skepticism, which is usually the polar opposite of what most entrepreneurs do, which is like, I just saw, I just found the cure for cancer. It's the best thing ever. Everyone's going to want it. And you spend all this money on infrastructure and building out this whole team and this apparatus, and then you go to market and then all of a sudden you realize, oh, it doesn't actually cure cancer and nobody wants this and nobody wants to pay for it.

Yeah.

And so you've invested all this time, energy, effort into building something because you think it's a good idea instead of letting the market persuade you or convince you to invest in it.

People are generally convinced that they know and this is completely normal. This isn't a bad, I mean, the outcomes of it can be bad, but it's completely normal. We are naturally convinced to think that we know the answers. And in reality, when you're creating a product, you are not an average consumer. As the, you know, the creator, the founder, the CEO, the whatever you are in your place, you are not an average consumer. The people that work with you are not average consumers. So you have to stop thinking like an average consumer and let the average consumers tell you the answers to the questions with data.

Yeah, that's, that's what in marketing speak, we call the curse of knowledge. Right. Where you're too close to it, sure. You know too much about it, you make too many assumptions about what other people know about it. And so then your, your judgment is clouded, your ability to actually perceive objectively the real landscape is, is impossible. You have to rely on outside feedback to give you those indicators. Now, the other thing that I'm curious about, because this is, this is not a software product, bottle keeper. This is a physical product. And so the idea of doing a physical product that's consumer focused with two people, like starting with two people and saying we're not going to hire employees, that sounds a little outlandish to me. So walk me through how that actually worked, like how you applied the systems and the processes and connected all the pieces together in order to keep your overhead super low and still be able to ship these products.

The foundation for that is setting the guardrail to say, we're not going to cross this line. Like period. We're not going to cross the line. If an opportunity comes up and it requires us to hire a person to do it, we're going to say no to it. Not forever, but you know, it's a dude. You don't have to commit to something forever. But for right now, for where we are in this business, we're going to say no to it until the time is right. And that's a decision that we get to make then. And then you get to lean on software and technology to automate everything. I mean, this in 2014, you know, timing is always a lucky part of any enterprise, right? With Bottle Keeper we, it would have been significantly more difficult if even possible to do that in 2005. But in 2014, most technology platforms will communicate with each other. And if they, if they wouldn't, you have products like Zapier that would make them communicate with each other. And so you can really. We just figured out how to put all the puzzle pieces in place to create a platform with the business. Not just how we sold product, but the whole business to create a platform that could scale to a point. And we found that point. But you know, we obviously we weren't making the product ourselves that was outsourced. We weren't shipping the product. Well, we were shipping the product ourselves. At the beginning, we literally have my dad who was semi retired, like in my cousin's shop in Phoenix, you know, stuff in boxes going out the warehouse back door. But that we did that because we learned the hard way that going into a3PL as a startup can be really dangerous because you're not big enough, you don't have the pull. They don't necessarily doesn't mean all of them. But certainly the one that we ended up in did like half our product disappeared literally out the back door in the first 10 days it arrived there. It almost completely destroyed the company before it even really started. So we, because I wanted to automate everything and that was not a smart thing to automate at the very beginning. At the very beginning, we needed to be shipping the product so we could control it and make sure that it was done 100% correctly. But you know, you grow out of that and then you get into a 3PO when you are doing enough Revenue to where you're, you know, you're not the tiniest client on the roster. And we, you know, we were spending money on Facebook and it was returning really well and we just stomped on the gas pedal.

You'll have to forgive my ignorance. I'm not, I don't know what three poor or three PO means because I've never built a product business before. What is break that?

Oh, yeah, it's the third. Third party logistics. Okay, so it's a, it's someone that you would, it's a company that you would send your product to that they will ship and fulfill for you.

Right, yeah, I'm familiar with that, that phenomenon. Basically like a, like an outsourced warehouse and they handle the shipping and handling. And so, so you, you found that at the size that you were at partnering with somebody as a third party logistics, you're just another cog in the machine. You're just shelf space to them. Instead of somebody that sees themselves as an extension of your, your business and a partner with you. Is that, is that what you saw or.

That was what we found at that stage in the business, yes, that's what we found.

Sure. And then as far as the shrinkage or the loss, like where did that come from? Was that just returns or like sending it to the wrong place in the wrong orders or what were some of the mistakes just so people listening can be aware of them?

Yeah, yeah, 100%. I mean, again, the, the problem with doing it super early is you're not going to get into the really good ones. You're not going to get into the reputable, the ones that we ended up in way later when we were doing $10 million a year in sales. Like you're not going to get into that. So there is inherent risk that comes with going with a small three pl provider that you, that only seven people in the world have heard of and that maybe that's different today. I mean, this is in 2013. You know, I haven't looked in that landscape for a while. So maybe there are better solutions for that today. But what happened is so of the half the product that vanished, half of that. So a quarter of our product literally got stolen. Like somebody backed their truck up to the door and loaded it and drove away. The other quarter they shipped to the wrong people. We only made two products. We made, and there was all one size, one color, but we made a special edition that was laser engraved, saved and numbered from 1 to 500 or whatever it was. And they shipped all of those special Edition units that these people had paid extra money for to the wrong people. So we ended up having to reship to the right people. And I mean it literally. It effectively vanished. I mean, it didn't literally vanish, but it effectively. From a cost standpoint, sure.

Yeah. And I mean, that's. I appreciate you sharing that because it's always easy to think. The easy button is just, I'm going to outsource, I'm going to delegate, I'm going to bring this other company in to handle this piece of it. But then if you don't do your due diligence or if you don't know what you're getting into and don't have both eyes wide open now, you've essentially put a part of your business in somebody else's hands instead of your own. Like you're relying on them to do what you want them to do or you are expecting them to do in order for things to run smoothly instead of very carefully, piece by piece. Kind of like lending it out as people build that trust or gain that trust from you to become a partner in your business.

Yeah. And the, the big challenge, again, this is all learning by pain. But the big challenge in that scenario is the three PL that we had decided to go with didn't actually own their facilities. They were effectively. We didn't know really, we didn't know the questions to ask frankly at the beginning. So they were a software, effectively a software tool that overlaid, you know, 10 or 15 independently owned three PL facilities. So they didn't have transparency or clarity into the facility itself. So if you are super early stage and if you have to go into a 3 PL, you have to make sure that they actually own and control their own facilities. Point.

Good point to make.

That's an important one.

That's an important one. Now, you went through crowdfunding, you validated the product idea. You start building out this manufacturing capacity capability, you're shipping these items. When did Shark Tank come into the picture? Was that later on? Like, how close to that was the GoFundMe or the crowdfunding?

Yeah, the timeline. So we shipped that first product in early 2014. We went through from a revenue scale standpoint, by 2016, we were doing $8 million in sales and we still had no employees. And that's when, you know, the wheels on the customer service wagon started to wobble a little bit. So we did hire a first person in 2017 to take that over. But Shark Tank reached out. They have casting directors that go out and look for things they reached out to us first, I believe in 2015. And we had gone through the process and we were. So in 2015 we did one and a $1.8 million in sales, something like that. And that's from 2014. We did like 150,000 in sales. So when. 151.8 to 8. So we jumped a little bit there. We went through the process with them and got to the very end and I was out of the country. I mean, the whole point of this was I wanted to be able to build a scalable business that I could operate from anywhere in the world. So as long as I had an Internet connection, we could operate the business. So my wife Katie and I traveled a lot for the first number of years, were out of the country four or five, six months a year. And when we were, when we were at the very final stage of Shark Tank, the first time around, the dates that they give you a week to film and they don't tell you when in the week. They, I mean, frankly, at that point they don't know. They just say you have to be in LA during. For this week. And that fell in the middle of when I was in Iceland. And so I was trying to fly back for that week and they didn't like that and it freaked them out. And so they pushed us to the next year. And then the next year there was too many beer companies in the thing, so they pushed us to the next year. And then of course in businesses like that, I mean, they have an enormous amount of turnover. So, like, all of the casting people were gone or executive producer or the producers that were responsible for us were gone. And we had a, a internal team member or had a marketing at that point that was our second team member, you know, knew somebody that knew somebody that we were able to kind of get back in the Door in 2017. And we filmed. But this was also very lucky. We filmed the week before Father's Day in 2018, and Father's Day was huge for Bottle Keeper. So we got to go on and, you know, we. You get to completely construct your. Your pitch with some guidance and sort of boundaries. But we got to get. Go on and say some pretty outlandish numbers as openers to, to the show because it was literally the week before Father's Day. So it was like the week before we did a million dollars. It was fun. Very fun.

No, well, because Shark Tank is one of these, you know, cultural phenomenons in entrepreneur space, business owners, they think, you know, what would it be like to be part of that experience, to put yourself in front of these, you know, highly successful entrepreneurs and on one level, get immediate feedback from people that are operating at a high level, like poking holes in your business model. Well, yeah, you say this, how did you come to this number? How did you come to this valuation? Why do you think this is a reasonable investment? Percent. All those kind of things, right? But then the other thing that I think a lot of entrepreneurs and business owners, you know, wonder about is if I'm given an opportunity like this and I put Shark Tank in kind of a bucket of other kind of like mass exposure Nexus events, right? So whether it's super bowl commercial, Shark Tank appearance, you know, feature in a key publication in your industry, like there's this one event that happens that then pivots the trajectory of your business. And Shark Tank kind of has that Shark Tank bump effect for a lot of people. Did you see that for, for Bottle Keeper after you appeared, whether you got investments or not, did you see that, that pivot after the episode aired?

I mean, we definitely saw a bump and we. It was a massive bump and it. Again, another point of luck with timing is that they aired the episode on like November 30th, which is lucky. I mean, you don't know that that's going to happen until a month out. You do not get a ton of notice. So there's all sorts of logistical challenges around trying to get enough inventory without overdoing inventory and all the risk associated to being prepared without having any idea whether it's going to air in October or the next May or even if at all. I mean, they over film the episodes and some small percentage of them actually do not air. And now in our case, we did, we did a great deal with Mark and Laurie for a million dollars for 5%. You know, it was a great. It turned out to be a great deal at the end of 50 minutes of mayhem. And so I was pretty unconcerned that they weren't going to air the episode. And we had. Alex Rodriguez was one of our guest judges. And so we built, at the beginning of the pitch, we had a. Built this whole thing around him throwing a ball at a bottle keeper on stage. And we knew that if we had air Rod throwing a ball on tv, there's no way they're not going to air that episode. So there was a lot of strategy that we, that we had implemented going into, into the episode to try to control for that. But I mean, it was a, it was a huge bump. We could directly could directly attribute something like an additional million dollars in sales in the five days after the airing just from Shark Tank. And then it aired again in January on abc, and then it airs. I mean, it's still to this day. This is six years ago, five and a half years ago. It still airs on CNBC probably every other month. So they're still getting bumps, you know, bumps from that. It's crazy.

That's incredible. Yeah. And that's. That's some good marketing prowess right there to recognize. How do we. How do we stack the deck in our favor to make sure they actually are this episode? Let's get Alex Rodriguez throwing a baseball. They won't cut that. That's really smart.

Yeah. They actually used it in the promo reel, which is what we thought might happen, but, yeah, it worked perfectly.

That's great. And then what was it like working with investors like you said it was? Mark and Lori were the two that invested. What was that experience like? Because I know a lot of business owners think a lot about taking an outside capital. And under work, what circumstances would it make sense? Like, you're not just taking out an outside capital so you can have a, you know, nicer balance in your savings account to weather rainy days. Like, you want to put that capital to work. So what was the. What was the thought process behind, like, which sharks you wanted to go after or potentially pursue if you had a choice? And what was the experience actually like working with Mark and Laurie after the fact?

So, in full disclosure, we did not do a deal in real life, so we did not end up taking investment. We did work together to get to a different deal, which, to be clear, and there's lots written about this online, so I'm not disclosing anything over proprietary, but, like, most deals don't actually happen. A lot of. Maybe not most. A lot of them don't actually happen. And the ones that do are generally going to be materially different than what gets done on tv. And that makes sense. I mean, if you think about it from an investor standpoint, they literally don't know who you are when you walk on.

Right. They got to do due diligence, too. Right. They just know this.

Well, yeah.

Shark Tank. Yeah.

Yeah, we. I mean, it's like Lori had seen one of our ads on Facebook, but, I mean, she didn't know anything about our business or Mark or Barbara, whoever the other people were on the show. So after that, 50 minutes or episode took about 50 minutes to air, which is full straight through. It doesn't stop. There are no, like Redos, it was complete chaos. It's literally four people plus Alex Rodriguez all asking the same question, like a thousand different ways to try to elicit a different response. And it just is complete mayhem. And the result of which is we did end up doing a great deal. And the editors treated us phenomenally well because they cut that, you know, 50 minutes down to what, like six? So they can make it into whatever they want to make it into. But they treated us really nice. Um, and after the fact, we. We did work with Lori and she was really great to work with. I mean, it was easy because she would just call me directly or that we weren't trying to, like, work through people. And we ended up not working together. She was real, really interested in. In the QVC angle. And that really wasn't our brand. That wasn't. We were trying to figure out how to get into retail. We had been saying no because it was one of the. It was literally the first thing that was the guardrail test of, we have opportunities, but we can't do them ourselves. We're gonna need to hire somebody to do it. So we said no to it. And that was going into retail. So by 2018, we just started to think about opening that floodgate because we had, I mean, we got a wait list from doing that. I mean, people were submitting things and we were saying, no, we'll let you know when we're ready. And so we had a massive. It was like 5,000 store wait list. And so going into retail was important. Going on. QVC was really didn't fit with our brand. We were more of a premium. The products were expensive. I mean, just didn't really fit. So we collectively agreed that that didn't make a lot of sense. And then with Mark's team, we didn't really ever deal with Mark directly. And we. But we did try to do a different deal with Mark that allowed us to not take investment as you're talking about taking on investment. Like, you take money from somebody, you have a fiduciary responsibility to that somebody, and you need to take that seriously. I'm not saying don't do it. If it makes sense for you and you're confident and comfortable in doing it, by all means, just understand that there. There's real liability to doing that. And I don't want to be on the other side of Mark Cuban's liability.

That's probably why.

But, you know, but he's. He's clearly a super smart, well connected guy. So, like, having him in the Bullpen would be incredible. So we did try to do a deal that would have allowed him to do more of a play more of a consulting role and earn equity. I think it was like 2% equity over two years, divested monthly that we could cancel at any time. And in the big scheme it didn't work. Not because either parties didn't want it to, but because we had. He needed his interest to be in an llc, which totally makes sense. I would be the exact same way. And we had just broken our partnership election to convert the company to an S election. And you can only do that every four years. I think that's an accounting question. And if we were going to do that again, it was going to cost like a half a million dollars in taxes or $300,000 in taxes, some crazy amount of money. So it just logistically didn't work.

That's fair enough. Well, kind of pulled the, pull the curtain back a little bit on what the Shark Tank experience is really like. It's, it's not just six minutes. This, this whole long multi year endeavor and then doesn't often work out at the very end.

But I mean that probably took, you know, but in that probably took from the time we filmed in June to the time that, that those negotiations stopped was. I mean it was probably 10 months. We could have done it faster. I mean there's, there's. While they're due diligence us and we're due diligencing them, they're also due diligencing the other 32 companies that they agreed to put money into on a TV show. Right. So there are certainly ways that you can speed that up and help to mitigate that risk. I mean frankly we probably could have figured out the LLC stuff at the beginning and not tried to figure it out at the end. But in our case it was an amazing experience. I would absolutely recommend push. Any company that has the ability to do it, to do it. Even if your episode turns out awful, it doesn't matter. There is so much free customer acquisition that comes out of that. And if you end up with a, doing a deal and you get a shark, that can be helpful for, for you. And you also get the publicity that keeps going. Like I don't. There's not really not a downside.

So that was Shark Tank saw this huge bump obviously from the additional exposure and kind of hitting mainstream, so to speak. And then you're still growing the company, investing in infrastructure to meet the new demand, still running paid advertising. At what point did you decide, you know, What? I think this season of business is coming to a close because you eventually sold Bottle Keeper. So what was that decision process like between you and the other kind of key stakeholders in the business? Did another company or firm approach you with an offer or say, hey, are you interested in selling the company, were interested in buying it, or were you actively shopping? Like, what was that decision process like? Both from a business standpoint, but then also personally and kind of what you're. What you were looking to do at that point in time.

Yeah. So if we, if we go from 2018, which was an incredible year, and, and continue moving down the timeline, there were a lot of challenges that came with growth. And as the company got bigger, I'm like a startup junkie. I like the early stage building, problem solving, hacking, like, figure it out, testing. That's the phase of company that I really like. And the, and the bigger that we got, the less time I spent actually participating in the company, the more time I spent with lawyers and accountants. I mean, by that point, we had amassed a huge patent portfolio that started with one. And I mean, that's a whole podcast in itself, dealing with intellectual property and defending it and that unbelievable cost and headache. It's important. That's ultimately one of the main drivers for the acquisition that ended up happening. But managing a. We had 40 more than 40 patents at the time of acquisition. So like managing a portfolio like that and policing it and putting all the tech and things in place, it's just. It's a slog. It's not fun. That's not the fun part of the business to me. And so we had just got to the point where, you know, I'm sure you get to talk about here a lot acquisition costs are increasing because you had so much more demand and, you know, relatively static amount of supply in ad markets and, you know, so every year, Facebook was our big driver. And every year it got more expensive to acquire the same customer. And we continued to push and squeeze and pull levers in and around, driving AOV and LTV and all these things that are important. But again, like, at the end of the day, we both, Matt and I just got to the point where we were not doing the things and the business that we really. Why we were doing it. I mean, it provided us with freedom. It was very flexible. That's really important. But we weren't actively shopping. We did have a investment banker reach out, and we had had that happen before, but we. We didn't have the conversations. We weren't just, frankly, ready for it. And at this point, we were kind of ready for it. This would have been in the summer, like early summer of 2020. And so we started down a process with that company's client and had a term sheet and then had another company appear, which is always helpful when you're going through an acquisition. And that company was a large private equity group that just acquired Arctic Outdoors, which is a outdoor brand and much, much bigger than us outdoor brand. And they were looking for other companies to acquire in that world. And so we were able to lean on the fact that we already had a term sheet and we're in active diligence with another partner to get them to move really, really fast. And they moved outrageously fast. And we ended up going that route and closed on that deal with Windpoint in March of 2021. And it was a complete exit. We were both. We didn't, you know, a lot of times you hear about private equity transactions or really any transaction where the founders have, you know, have to stay on, invest out for two years or three years with earnouts and a bunch of complicated, difficult things. And we were, we were definitely, we'll do it, but we were completely out by this date. We don't want to own 2%, so we get dragged along for forever. So it was a really clean. They were great to work with. They. They did and said everything that they. They did everything that they ever said they were going to do. So it was, it was a really a positive experience.

Well, that's great. And, and I really admire your. Your introspection and kind of recognizing, you know, this is, this is kind of hit the ceiling of, of what becomes personally enjoyable, you know, because once you've become. Once you build something, it's easy to kind of hold onto it beyond when you need to, especially if you've built it to be sellable, where you're not like the. The corner piece of everything or it's built around your personal brand. And so because there's always this thought of, well, maybe if I wait another year, we could get 20% more. But just kind of knowing when to call it and say, this has been a fun ride, let's see what's next. I think is really admirable because it's not always the easiest thing to do. And it's like, well, we're making 8 million, 10 million, 15 million a year. It's not bad. Not a bad business. Not many businesses get hit that mark.

Yeah.

So, yeah, I'm, you know, not just like blowing smoke up your butt. Like, I'M really impressed.

I mean, it's just like by the end it just got hard. It was so much harder for the wrong reasons. Yeah, we could never figure out how to get off the Facebook teat, so to speak. We tried and tried. I mean, in hindsight there was a lot that we were not doing right. And those are the things I get to learn from and move forward on. But it was just time.

So now you've pivoted. Your current venture is called Pentane. And just explain a little bit about the origin of that business, the problem you're solving, your customers that you're working with, and how Bottle Keeper helped inform this new business that you're working on.

Yeah, I'll do that in reverse order.

Fair enough.

If we look backwards at Bottle Keeper, there were boatloads of things that we did wrong and learned hard mistakes from and there were a handful of things that we did really, really well. And one of those, one of those is putting up guardrails and being really strict with them. But the other is that Matt had. We're both same super nerdy science degree, so we're both very data driven, science minded people. And I understand you have a history in rocket science, so fair enough.

Yeah, so that's.

We probably go go down that rabbit hole some other day. But for sure he had gone. When I was went into the medical world, he had gone and got an mba. So he had a, and was also operating a family business doing alternative fuel conversion systems. So he had had a mind for, for math and, and how to apply that math into a business for the, the decade that kind of led up to that and with. So what that did is, is it created a foundation for us to be able to design a system that allowed us to, to have real time and insight as to how the business made or lost money. And really granular insight. Not just like is it up or is it down? But really, really particular, you know, day over day, ups and downs, week over week, month over month insight so that we knew what was happening before we got our P and L from the accountant next month, which is how it typically happens now for us. We were just solving our own problems because I was doing all the marketing and all the paid media and then also participating heavily in the operational finance side of the business. I and Matt, we were able to like connect these two silos that generally exist in a company and make them speak the same language to solve our problems. Because it was just he and I, we had to do it. And so we operated on that system which was, I mean it was just spreadsheets, it was just math inside of spreadsheets through the entirety of the company. We tried to build it on other platforms like NetSuite and DataRama and these things that were, I mean NetSuite is still big, but Datarama at the time, they, none of them worked. We could never figure out how to get it done. And so fast forward, we sell the company. I take some guidance from a wise elder man to not just go and try to jam a square peg into a round hole and start something immediately. And so that, taking that time. I have young kids, so spent a lot of time with family. We live in Montana, so we spent a lot of time in the outdoors and doing all that fun stuff. I got bored one day I realized that my hardest decision was what to have for breakfast. And that was a problem. And so I started doing some advisory work. And that started with companies that we had invested in that Katie, my wife and I had invested in. And what that did was it I started digging into the, the, these first two companies and I realized even though one of them, the first was a, I mean it was a 20 plus million dollar yield business, it was profitable, it was healthy for like all intensive terms. But when it really came down to it, they didn't actually understand how the company made money. They didn't really understand how the company spent money. They just, they knew on their P and L that they spent this amount and they made this amount. The difference between those two is their net profit at the end of the year. But because they didn't really understand how those things work in a consumer business, they didn't know what levers to pull to maximize that outcome.

Sure.

Does that make sense?

No. Totally.

And so, so I started rebuilding. I mean we had lost all this stuff in the, in the bottle keeper transaction. So I built completely different versions of, of all of this. But I started reconsidering the way that I could use math to solve some of those problems. And it created clarity around how they spent money and how they acquired customers. And the result of which is it increased their net profit by 50% the next year. They were already profitable. Like it didn't take them from nothing to something. Like it just, it gave them the tools to get clarity around how to maximize that outcome. So fast forward a little bit. I get paid as an advisor to go in and help a company that's losing money, losing a lot of money. And this is a smaller business, say $2 million a year roughly. Consumer brand E commerce and they're losing about $100,000 a month and they have five months of Runway left. Do the same thing. I mean at this point it's evolved a little bit. Put implement the same system in to their business and gaining clarity around how they're spending money so they could make changes to the business to make it healthier and how they're making money so they could make changes to their customer acquisition to drive more profitable revenue. The combination of those two things completely, completely changed this company. They lost a hundred thousand dollars the first month, they lost $10,000 the second month and they made $50,000 the third month. And that third month was in January as a consumer product company. And now fast forward a year, they're crushing. They've 2, 2 1/2 x their revenue, they're healthy, they're profitable. So that was, that was the real light bulb of wow. This is, this concept that we had constructed at Bottle Keepers actually can be really, really impactful. So instead of it living in in complex spreadsheets, started building into software. Hence pentane.

That is so cool. Now you know I definitely agree with you. It's especially in an E commerce type environment where you're not tracking things a quarter at a time. It's almost hour by hour sometimes depending on what your inflow and your outflow looks like. What were some of the challenges of developing like a real time dashboard when most of the systems and processes that are out there are only as reliable as your manual inputs, which is always problem. Right. It's kind of like operator error. If you don't give it exactly what it needs and precisely the formula that it needs it, it's just not going to work. It's not going to give you what you need. So how did you approach that level of having this be an additive thing for these business owners instead of like here's a new time suck that I have to deal with every single day. And then how are you choosing your product development roadmap? Because with something like this there's an infinite number of directions you can take it because there's an infinite number of metrics, KPIs, things that you can track to give you a positive or negative indication about something you could be doing to change and make it better. So what does it look like to essentially develop something that is an extension of somebody who isn't normally a math related person. And then from your perspective as you're developing this product, how do you really optimize it for that ideal customer profile and what their needs are to make sure you're not over developing it or developing it in a alternative direction that's not going to be as fruitful for them.

Yeah, that's a really good question. The first part to that is the math is complicated. My benefit is that I'm good at math. I understand the math because I wrote the math and I used the.