256 - The Importance of Patience and Long-Term Vision in Entrepreneurship with Ohsnap's Dale Backus

Welcome to Listening with Leaders. I'm Doug Noll, lawyer turned peacemaker. I teach executive leaders how to listen to emotions rather than words so that they can become the leaders everyone wants to follow. And I teach those same leaders how to be authentically present, available, and connected to their families despite being insanely busy. I have learned that we are 98% emotional and only 2% rational. Learning how to listen to emotions is, in my experience, the foundational skill of life. Stick around to the end of the show and I'll reveal how you can be on our next guest in 15 to 20 minutes. So let's get started.

Dale Backus, welcome to Listening with Leaders. You are the founder of a company called OH SNAP, O-H-S-N-A-P, founded OHSNAP.com.

Welcome to the show.

Yeah, thanks for having me.

So you, your company O-Snap, you're a serial entrepreneur. You've had 3 or 4 companies that you've developed over the years. This company is involved in mobile phone accessories.

Yep.

Of different kinds. Why don't you start and just give us a little bit about your backstory?

Yeah, I have a pretty interesting backstory. Out of high school, I didn't know what I wanted to do with my life, but I was really interested in video. Video back then, this is like 2003. I graduated high school in 2003. It, it was still very much film dominant and digital was really starting to just then emerge. And, and so I had a buddy who I befriended in high school who was just really ahead of his time. His whole family was in this sort of like rising digital filmmaking space. So I got involved with them and we just started doing stuff together. And then after high school, we started a small media agency or production company called Five Point Productions. It was literally built in his dad's basement, and we just literally did— I was 20 years old, didn't know what we were doing. We just knew we wanted to make videos for a living at the time. And, and so we literally just started cold calling like car dealerships, and we were like, hey, your commercials suck, we could probably make you a better one for less money, whatever you're paying. That wasn't a great pitch, didn't really work very well. I did a couple of them, but it was a pretty terrible gig. And, and then we were sitting there one night and came across this an ad for a contest called Crash the Super Bowl run by Doritos. It was the first year they ever did this or anyone ever did this, where it's basically like anybody can submit a consumer-generated video ad for Doritos, 30-second spot, and it would basically compete to win. And if you win, you would get to, they would air your commercial in the Super Bowl. And we were like, we found it 4 days before the deadline and we were just like, okay, let's give it a shot. And we have nothing, a whole lot else going on.. And, and so we stayed up all night, concepted, shot the video over weekend, edited all night, submitted it. Long story short, we ended up winning the contest.

Wow.

Had the commercial aired in the Super Bowl. I think it was 2007 Super Bowl. And, and that really propelled us. We got a lot of local regional media coverage about it. It was a pretty unique thing at the time, right? This is, I'm pretty much pre-YouTube or very early YouTube. I can't remember. And so the concept was pretty novel. And so that sort of got us a lot more clients. We got, we had an easier time picking up the phone and getting jobs to make videos for people, various companies and things. But along that way, along the way, we were really struggling with budgetary issues and being able to produce like a high-level quality content, right? Because again, unless you had hundreds of thousands of dollars back then, technology was very limiting in terms of the quality of content you can produce. And so I was constantly in the basement just trying to build things to help us improve our production quality. One of those things was a small high-definition monitor at the time. There were very, there were no like small battery-powered, like 720p or higher high-definition monitors that you plug directly to the camera in order to see your high-definition image coming off the camera sensor. And I built one out of, I was a hobbyist. I was always building stuff anyway. I found this LCD screen from China and I bought some and we built these monitors based on, taught myself how to do 3D CAD and fabrication and things and built this metal box and put a bunch of monitor guts in it and and we were using it for ourselves and we were like, huh, this is actually really useful. And so at that point I was like, I like the business model of selling a product more than I like selling a service. That just instantly hit me. I was like, you build something one time and then sell it a bunch of times versus build one, sell one, build one, sell one. And so we built some of those monitors, we sold them on eBay, people bought them for $2,000. It was like a really, it was really interesting and exciting. And so we decided to pivot into that. So that was our second business, was a business called SmallHD, still in the basement at the time. Me and my co-founder Wes and his brother and his dad and a couple other people. And, and so we didn't know anything about how to build a consumer electronics business, right? Knew absolutely nothing. And I could write a book on the amount of mistakes we made and all the amount of times where things should have ended, but crazy, like we ended up building our first real monitor and, and did a, basically a self Kickstarter. This is before Kickstarter existed again, and where we did a one-time pre-order on our website and we sold like $60,000 worth of monitors in 24 hours. And then we had the money to go buy the parts, built the monitors, shipped them out, and that started that ball rolling. And then 7 or 8 years later, 18 now, we sold that business to a public company in, based in London. And, and that was a crazy ride. Again, happy to answer any questions about it. It's a very long story. So in this intro, I won't really dive into that in too much detail. I stayed with the company after that, cuz by 2014 I'd only ever worked for businesses that I'd founded. And I wanted that large company experience. I wanted to see how a large company operated. I wanted to have the funding of a large company to see what I could pull outta my head and bring into the real world. And SmallHD went on and still is now the predominant high-end monitor manufacturer in the world now. They're on every major film set you go to. If you're shooting Top Gun or the Avengers or whatever, you likely have a SmallHD monitor on set. So it's a really cool accomplishment. Literally knowing absolutely nothing about how to build a, a consumer electronic business or a professional electronic business essentially to now being the number one brand in high-end video monitoring was a really cool accomplishment. But then when I left in 2019, I, I went to a trade show in like 2017. It was CES and I was looking for my next thing. It was, I'd been at the company now for 2 or 3 years and I was starting to start to see the end of the line. I was like, all right, this was cool. I learned what I need to learn, but I want to go do my own thing again. And I saw a phone grip there at the show and I was like, this is interesting. I get the point of this product. I see the need. Phones have gotten big. They've gotten expensive. They're fragile. We're using them more and more. And I was like, there's gotta be a better way to do this thing. And I liked the profile of the business because It was small, light, more good margin potential, a lot of opportunity for innovation, better mousetrap type of thing. And as like a product guy, an inventor, I felt like that was something I could, because when you're starting a business, you like, you need to be able to carry, unless you're funded, you need to be able to carry so much of the burden early on the business before you can afford to hire people. I like putting myself in positions where I can be really effective with the thing that will most likely increase probability of that business succeeding, which in this case is the design of the product. And, and so 2017 had came up with this concept for a phone grip that was a serve the thickness of the, the leading competitor and started developing that with a partner I, I knew in China that I'd worked with at SmallHD. And in 2019 launched a Kickstarter for that product. We did about $700,000 on that Kickstarter.

Wow.

And I was like, okay, that's a good sign. I think that's enough for me to take the leap of faith. And so I quit my job at SmallHD in, in December 2019 full-time. Got a little tiny office over here and just me and one desk in an empty room. And then I brought in a couple guys that I had known, one guy from SmallHD, another guy who was just a friend, and another guy who was essentially interning for me at SmallHD, super talented guy. And it was basically the 4 of us and we started OSnap. And 5 years later, which is crazy to say, it doesn't feel like 5 years, we're 20+ people in a, in a really cool large office and we're doing a lot of really cool things and who knows what's gonna happen from here, but it's been fun.

Wow. Your manufacturing is done over in China? It is. Yep. And so you do all the product design and sales here in the United States?

Correct.

Got your relationship with your people in China who— Yeah.

Yeah. When you're building consumer products, it's really hard not to build over overseas. It's just the economics of products to be competitive, to have the margin model you need to grow and all that. It's just really hard. Ultimately. It is part of my plan slash dream to move manufacturing onshore if once, because I think the only way to do it is to employ a fairly heavy amount of automation things, which requires capital investment. But I would love to just not from the standpoint of really anything other than just having more control, having less lead times, having just, I think it'd be a cool story. There's just a lot of reasons why I'd like to do it, but right now it's really not in the cards.

So you've been at this now. Since what, you graduated from high school in 2003, so you've been out 21 years. What is it that gets you up in the morning, gets you excited to go to work?

I ask myself that a lot because to be quite honest, I have a hard time getting up in the morning. I'm a night person. I do most of my creative stuff at night. I'm just, I've always been a night person, but honestly, what gets me excited about anything is products. I just, I love solving problems with physical products. And so I, I know I'm never more excited than when I have just, my brain is latched onto an idea and I'm like, oh my God, that'd be so cool. And we have a really great prototyping facility.

Here.

I'm very proficient in product design and fabrication and prototyping. And, and, and I just, I love bringing new useful products into the world. If you would have told me 10 years ago that I would build a phone accessory business, I even remember actively like mocking phone accessory businesses like 10 years ago, just because I was like, who would go and start making phone cases? Like that just seems like the worst business ever. There's no differentiation. There's a ton of competition. It's a low-priced product. Like it just, it's just funny how things work out. But, but yeah, that's, I really, it fits my personality well because I'm, I would consider myself, I've never been diagnosed, but I consider myself ADHD. I get, I lose, it's easy for me to lose focus and get bored of things pretty quickly. So the, so this sort of type of product pipeline here is they're pretty short development cycles, right? So I get to do something and get really into it and then pump it out and go to the next thing every 4 to 6 months versus the SmallHD, the development cycles were like 2, 3 years long sometimes. And so I don't like that.

It's your creativity and to be able to— yeah, you got a total— it's your playroom, right? You can get—

yeah, exactly.

Yeah.

Creativity is it. Yeah. I'm very much a creative person. I just love, I love just creating even videos and whatever else. I just, I really enjoy the creation process or the creative process. And that is the number one thing that gets me up in the morning for sure.

Wow. So. You've been successful in 3 businesses. What do you think is unique about you that you bring to the table that has made you so successful?

That's a good question. I think it depends on who you ask, but if you're asking me, I would say number 1, I'm willing to take risk. I think that's really, if you're going to start a business, that's just something you got to get comfortable with. I think I have some sort of brain deficiency that makes me impervious to fear or something. I just don't even really think about it too hard. I put my name on the line for these businesses so many times. I had to put my house and my, all my net worth up for, up as collateral for credit lines a million times now. And, and people always around me are like, man, you're crazy. And I'm just like, I just, I believe that we'll figure it out. Whatever it is, we'll figure it out. And that would be number 2. I think number 2 is I just, it's optimism. I think entrepreneurs tend to be optimistic people. I think you have to be, cuz it's really freaking hard to start and, and, and run a successful business. I don't think people understand how hard it is. It's just, always something and relentless optimism. And I will also pair that with grit, just the willingness to push through, get to the next stage, get to the next stage, problem solve. All those types of things are really important. I think the third thing, and probably the third most important thing would be I have an ability to get to attract people, talented people. And I love working with really smart people who are smarter than me. I think, I think that's a really undervalued trait for a lot of people. A lot of entrepreneurs have a hard time letting go. They have a hard time. Delegating or thinking they're just like removing themselves from processes. Like I'm the opposite. I have a really easy time letting go of control and authority and giving people autonomy to not just succeed, but fail as well. And I'm probably to a fault, I would say, but I just have an ability to get really smart people to buy in and come in and then add value. And that compounds over time. If you can do that over and over and over again, like I look at business as a way to really collect great people together to under a common vision and goal. And if you are, if you're reasonably good at understanding what makes someone tick and why they're good or why they're not good, and you can attract the good ones, it self-organizes from there. Like, I don't really think I deserve a ton of credit for the success of OSnap to date. I think my team is just phenomenal and I'm really lucky to have them.

You are, you're, you are stating something that I hear over and over again on this show. And that is that one of the most important things a leader can do is assemble a great team and then let the team do the job. Don't micromanage. And that seems to be one of the hallmarks of a successful entrepreneur, a successful leader. So that's pretty interesting. I'm wondering if, do you have, I'm just throwing this out, I really don't know. Tell me about your listening skills. Do you, are, is that something that you have a problem with because you're so, your mind is so active that it's hard for you to focus on people?

Yes.

Okay.

I thought so. Yes, I would say I struggle with that honestly. And it's not, it's something I have to be very intentional about when I'm having a conversation with somebody. My mind wanders and drifts and they'll say something that triggers something and I start going off over here. I have to intentionally pull myself back. And that's, that is absolutely a struggle for me every single day. And as the company grows, you have more and more people around you. You get more and more traffic, I would say, like through your office, your desk, right? Like I sit over there, I'm doing stuff. I'm immersed in something. I'm what I call plugged in. And, which is, oh, what if someone just doing these drive-bys all day, right? And I'm just like, just calm down, listen to them. It just, you, I think you have to be good at triaging and you have to be good at really making quick decisions. That's like what I found more and more over the past year in particular. It's just feels like half my job is just someone coming by saying, hey, this is what's going on. What should we do? Do you agree with this move? And again, I really try to empower people as much as possible. I don't really want other people to make decisions, but sometimes decisions just have to go through the person who's ultimately responsible, which I get. But yeah, it's, uh, it's interpersonal skills like that are being the kind of person I am can be a struggle sometimes for sure. But again, I've been doing this for 20 years and I'm very aware of my flaws and my strengths, and I really try to design my life and my team and everything else around maximizing my strengths and minimizing my flaws. And a lot of that's done just through getting the right people and then serving those people. I really think the ultimate job of a CEO is, is just to, just to get out of people's way and just to empower them to do their best work and not second-guess them all the time. Don't talk down to them, don't belittle them, get— make them feel like adults, make them proud of and motivated of what— for and what they're doing. And if you can create that fertile environment, I think that's the That's number one way to succeed in business by far.

Absolutely. And how do you go about, how do you about go about creating that culture of creativity and responsibility and accountability and collaboration and cooperation?

Yeah, I wish I had a really good thought-through answer on that. I think I honestly think I was just blessed being born the way I am in certain aspects, right? Like it just comes natural to me. Like we're, we're, I'm a fun guy. Like I just have, I enjoy just laughing and joking around with people. I think there's pros and cons to it though. Like we have a pretty easygoing culture here, right? But there, there comes times, this is something we're actually going through right now as a company. We're trying to guide the culture into more of a performance-driven mindset and having set goals and deliverables and accountability and all those things that people always talk about in business books and things. But again, it really, the level of sort of oversight and structure you have to give people is directly linked to the type of people you have and how, how capable and how autonomous they can be. And again, I don't feel like I've had to do a ton of intentional sort of culture creation. It's just, again, the flowers arrange themselves. At the end of the day, you get the right people in the room and it is all I need to do is make sure that people are aligned and we know what we're working for and occasionally provide some input and some guidance and, and it works well. But again, on the culture thing specifically, I just, it's a, I think if people have fun and they're happy, they're more likely to care about each other and the business. It's one thing that. I've done very intentionally here is everyone at this business today has some piece of the business as well. And cultivating that owner's mindset in everybody, I think is something people talk about a lot, but it's hard to do. I think Gary Vee said once, he was pining about someone talking to him about like, why don't they, why don't my employees care as much as me? And he's like, why should they care as much as you? That's a ridiculous notion. Of course, you're not going to care as much as you do. If the business blows up and sells, they get, they literally get nothing from that. So why, so where's the motivation?. And so I rung a bell with me and I made sure this business to give everyone a piece of the pie, because I think ultimately if people care, if people wake up and actually care, and honestly, people here sometimes care a little too much. It's, and it's funny, even today, like we're working on this product and, and we're trying to make all these decisions about design and colors and things. And so we're in Slack and I just posted this poll with these pictures, different variations of products. And it just, it turns into these like heated debates because everyone just really cares. And it's fun is something as trivial as a phone accessory. Stimulating and it's fun. And, and I think people get satisfaction out of seeing something, their work in the hands of real people. And that's another reason why I like this business. It's something that can literally touch everybody ultimately if we do our jobs well enough. And if there's nothing more thrilling, and this is something that really drives me as well back to why I wake up in the morning. This started happening at SmallHD where we were really early on, we're just like this rinky-dink monitor company no one's ever heard of. And then all of a sudden you see your monitor pop up in a behind the scenes shot of some TV show or some movie or something. You see a famous actor on the screen of your monitor and you're like, oh my God, It's like the best feeling in the world. You start to see it more and more. And so that's like something here we have an even greater opportunity to do because it's a product that literally applies to everybody. I think that really drives me and a lot of other people as well.

Where are you going to hang with this company or are you going to get tired of it and go do something else?

It's hard to, it's hard to predict, honestly. But the plan right now is to stay, stick with it and, and grow it as, as, as much as it makes sense. And I think. People ask me what the exit plan is and all that kind of stuff. And ultimately the goal is to sell the business. I'm not going to do this for the rest of my life, but on what timetable, I don't know. And I just don't think there's— I feel like we're just getting started. I think it's another common misconception in business is people think it's going to happen overnight, right? Pick a business that, you know, that you enjoy because it's more than likely going to take 10 years to really get where you think you want to go. And when you start, you're like, oh, it might take 2 or 3 years, but 5 years in and we're just getting started. Like it, there's still so much to do. I'm not bored yet.

And you got a lot, you got a lot more product ideas bubbling up here or things that you can do.

Yep.

Problems you can solve.

And 100%. Yeah. But I have a ton of ideas and you're constantly trying to balance, like I have this, these legal kind of company guidelines or mission statement type things that I wrote when we started the company. And I was just talking to him today, actually with somebody. And it's so easy, especially in this space to fall into the trap of we could go make cases and batteries and power bricks. Cables, and there's like all this like trinkety stuff we could go make, can be very easy to make. But what we're trying to build here is a brand. And if you're starting a business in a commoditized industry like this is, right, where you can go on Amazon and buy a litany of cases for $10, right? How do you convince people to pay more than that or for any other phone accessory, right? And that's where the brand comes in, right? So making sure that our brand vision is aligned with what we do every day, making products that you can tell we put a lot of care and time into that really enhance people's lives that are designed well, good materials, all that kind of stuff. Stuff. But the brand piece is how do we, how does the brand make people feel? Like, how do we communicate to our customers outwardly? What do they see when they touch? What all the touch points look like is something that I think really sets us apart in this space. Like when you look at across the landscape of our competitors, most people are just hawking Chinese junk. And that's, that's fine if that's what you want to do. But for us, we're really trying to build something more meaningful. We make these great videos and ad campaigns that has really given us a lot of notoriety in the industry. And so we're really like a significant player now. The space. And I think the brand piece is something that, um, I just think is incredibly important in any business, but particularly a consumer-facing business like ours. And it's something that, having like my media background and everything, I always knew was important. And I just think there's so many good examples where— come say, take a company like Dr. Squatch, right? Like, you may or may not have heard of them, but they're a soap, a D2C soap company for men, right? Just bars of soap. And if I walked into a pitch meeting and I said, hey, I want to start a D2C men's soap company, right? I need $5 million. They'd be like, get out of here. But that's a $100+ million, $150+ million brand now selling men's soap. Why? Because of the brand. They went to a massively commoditized industry. They understand who their customer was. They built the brand around it. They had great execution. And that's, I feel like there's a similar opportunity for us here because the accessory brand is very watered, or accessory industry is very watered down. There's very little brand recognition. There's very little fun or fun brands anyone really cares about. If you walked into a mall and asked people what case they have on their phone, 80% of them wouldn't even know. And so that's where I think there's a huge opportunity.

Wow.

You're pretty jazzed up about this. Yeah, of course.

Gotta be. Gotta be.

Oh yeah, I know. It's exciting. One more question, Dale, and I'll let you go. What's one thing about yourself that we wouldn't know about unless you revealed it to us?

Huh. One question that you wouldn't know about. I want to give you something useful because I was going to say I'm a huge Buffalo Bills fan. I, uh, I really like disc golf. I would honestly say that I'm a terrible communicator. I don't know if that's considering the audience here, and it's something that again I've had to supplement for in my, in my life, in my business, to just— because again, I talk about alignment, all this kind of stuff, but if you can't communicate things well, there's a paradox and I just feel like I've found people around me to fill in those voids and create these communication pathways that has mostly worked. And I don't know if that's what you're looking for. I think, I don't know if you're looking for something just like fun or serious, but there's a few different things there.

Good enough. Thank you so much for joining us today. It's been a great conversation. Yeah. Thanks, man.

Good talking to you, Doug.

Doug Noll here. Thank you so much for listening to Listening with Leaders. If you are a successful executive leader who would like to be on this program, please visit podcast.dougnull.com/podcast. If you got something out of this interview, would you please share this episode on social media? Just do a quick screenshot with your phone and text it to a friend or post it on the socials. If you know someone that would be a great guest, tag them on the social media to let them know about the show and include the hashtag #ListeningWithLeaders. I love seeing your posts and guest suggestions. We are regularly putting out new episodes and content. To make sure you don't miss any episodes, go ahead and subscribe. Your thumbs up ratings and reviews go a long way to help promote the show and mean a lot to me and my team. Want to know more? Go to my website, DougNoll.com, or follow me on LinkedIn, Facebook, and Instagram. That's @DouglasEnoll. Thanks for listening, and we'll see you on the next show.