Part 2 - From Kickstarter To Shark Tank: The Unconventional Growth Playbook

Welcome to this edition of the Million Dollar Mastermind podcast. This is where we pick the brains of high achievers from all walks of life and get their hard earned real world insights on winning. I'm your host, Larry Wydell.

And so what was appealing about Bottle Keeper?

Well, at the beginning, we. Nothing. To be fair, I saw my cousin Matt invented this product again, like I mentioned, sitting on the beach drinking a red beer out of a red solo cup. And he's a little bit of a maniac, and he wants his beer out of a Corona bottle in a specific temperature. And he sees people using water bottles all over the place and just has the idea, why can't I put a beer bottle inside of that? So he invents this product that is. It's like the bottom screws off and a beer bottle goes inside and you screw the base back on and it's insulated and it keeps a beer cold and glass protected and all that. And I didn't largely think, I thought it was a kitschy, interesting idea. I didn't think for a second that people would pay real money for it.

Yeah.

So he pushed me to get involved because I now had all this sudden free time and I, and I admittedly said no for a while. Yeah, Like, I don't think it's a thing. And then finally we were super close. He was the best man of my wedding before all that stuff. And finally said, okay, fine, we'll, we'll test it. I'm going to prove to you that people are not going to pay real money for this. And we started to execute a strategy. I shot a video on the beach with our GoPro and put up a website and spent $500 on Google Analytics or Google AdWords and sent people the website to watch this video and said, do you want this short version? And enough people said, yes. It was like, okay, that's fine, people are interested in it. But are they going to pay more than $7 for it? Because if they're not, it's not a company, it's a hobby. And so we use crowdfunding to get prove that people other than our aunts and uncles and moms and dads would swipe credit card to buy this product at a real price point before we spent any money building it. And it worked really well. I was like, oh, geez.

What experience did you have with crowdfunding before that?

0. I had no experience in any of this stuff. We're making it up as we go, solving problems.

Who comes up with a crowd? Crowdfunding idea.

I did. I wanted to prove that again. So if we step back, like, my brain is very data scientist.

Yeah.

Like, I think when solving problem, I think in the terms of a scientific method. Like, you create a hypothesis, you limit the variables, you go down this path. And I was deeply concerned that people would not spend real money on it. Okay, so how do we prove that? What's a test that we can run to test that hypothesis? And the best way I could figure out to do it. Crowdfunding was big at the time. Like, Kickstarter was massive. Indiegogo was big. And so I. The only way I could think of to get it to a mass audience that didn't know us, like, they weren't attached to us, they didn't have the emotional connection to us was crowdfunding. And that was a really good way, and I still think it is today, a really good way to prove.

You get on crowdfunding, you learn how crowdfunding works. You learn how to put the pitch together and submit it, and money comes in. So how much money did you raise?

No, that's not it. Money doesn't just come in. There's a lot of other stuff that goes into it than that. But it. It went for three months, and we. We raised like, 350% of our goal, which was like, $18,000. Our position was, again, this was not a raise. This was not an expensive company to start. Matt and I each put in $10,000 total in the whole life of the company. So the point was, at $20 a unit, how many do we think we need to sell to complete strangers in order for this to be a thing worth pursuing?

Yeah.

And we figured that would be about $5,000 in sales. So we just wanted to see if we could sell $5,000 in sales to strangers. And we sold three times that. Yeah, but we had to do. I mean, there was PR and press stuff that we had to hack together and figure it out, because you can't just put it up on a website and hope people look at it.

And so to get to figure that part out, you just did your research. You looked at what other people had done and cobbled together your version of it.

Yeah. And leveraged connections. I knew somebody that was involved in a crowdfunding campaign or platform there was able to get us access to certain parts of their platform that we probably shouldn't have got access to. And they did some PR things for us that led to exposure. That happened over the course of a couple of months.

Fantastic. And so while you're doing this. And unbeknownst to yourself, you're also continuing to expand your business skill set.

Yeah.

Problem problem solving and on the job. Problem solving and way to look at things, evaluate things, make contacts and so how did that explode? How did you really catch on from 15,000 in sales to where now you've got 8 billion in three years. Kind of mind blowing really.

Yeah. Again, in hindsight is one of those like high level highlights. It is, it's totally mind blowing. How that happened was so if we again we use my guardrail once it started to move, my deal was look Matt, well let's go do this. Obviously it makes sense to do this. The data is telling us it's worth doing. But I am not going to manage a person. We are not going to hire people. So we have to build the company in a way that does not require us to hire people. He's like great Fig. Yeah, okay, go do it. Like great. Here I go.

Why did you have this animosity about the idea of managing a person?

Because I had just come out of this like decade long, heavy, weighted, intense thing and I wanted to not do that again. I wanted, I and to myself I kind of wanted to see how much of a business could be built with not having a team. I would mean this is in the time of like Tim Hours. Tim Ferriss's Four Hour Work Week, which is a kitschy title that he admittedly a B tested but. But there's a lot of good stuff in there. And I read that and it was. It's all about using automation to make things leaner and better. And it sounded incredible coming out of the experience that I had just left.

Yeah, yeah. As I point out from time to time, he's an incredible liar because even at when he was in college at Princeton they said he worked 24 hours a day.

I know. I mean he talks about that title like he was literally testing titles and it worked perfectly because obviously the book did really well. But the concepts are not your work to four hours.

The concept is valid because the thing is you get a salesman or salesperson and they're like I'm working all the time morning and at night, this, that, the other. Then you find out they actually hit 30 minutes of face to face time with a prospect during the week. In their mind they're just going around the clock. I'm just overwhelmed. So the four hour work week is a great as a valid concept and so what amount of the time you're spending is actually useful. Are on point so you go in there and I had a similar experience in this. We followed a lot of the same path because I went out of Georgia Tech, I went into construction, and I'm a resident superintendent for residential home building. And So I built 100 houses in four years, which means 11 houses under construction in five different subdivisions at all time. Going, taking them through 25 different phases of construction. And at that time, in Atlanta, they'd had an apartment boom. So all of the good subcontractors went over to build apartments, and we were left over with people who didn't know, had just got introduced to a hammer the day before or a trowel. And you had to build houses with these guys. And so at the end of four years of that, I got out of that and went in financial services. I said, I've got to get a more stable industry. And I stayed in sales too long, but it appealed to me because I did not want management.

Yeah, totally understand.

And I. I used to say, when I get up in the morning, my feet hit the ground. My whole organization is. Is rolling. I don't have to worry about anybody. Yeah, Company one, that was the phase you went through. But there comes a time where you got to say goodbye to that phase of your life. At 4, what did you do to build software? How did you automate your.

Yeah, so we started. So the. The things to look back at that were notably lucky were the timing of when we wanted to do this. There was enough software that already existed that other people had built that would communicate with each other. Examples of that are like Shopify as an E commerce platform. Anybody can pop up a Shopify store today. And in 2013, that was still mostly true. You could do it on WordPress with WooCommerce or whatever. And that's what. So again, I had. Because I didn't want to have people. That meant I had to do literally everything. So I had to build. These are all just puzzles. I had to solve the problems. I had to build a website, which means I had to write copy. I had to shoot images, I had to take, make videos, I had to create email structure, I had to do customer service. I had to do our social media. I had to do our social media marketing, which means I had to do a whole nother set of creative for that. So I had to do. Learn how to do every single one of those positions, which was really important because by the time it started to move, which wasn't until the summer of 2014, so about eight, nine months later, and it. That was Our first big inflection point happened when Facebook launched their video ad platform because it gave us the ability to show our product in action and it just changed everything. We went from kind of making these numbers up, but we went from like $2,000 a month in sales to 20 to 40 to 80 to 150 to selling out a product. And that happened over and over and over for the next two years. We literally could not spend money fast enough advertising and we just literally, we didn't pay ourselves. We put every nickel back into the company because we had no fixed expenses or I mean our contribution margin. The amount of money that was being made per dollar earned was really high. And so we just reinvested and grew really fast as a result, which is how we got to 8 million in three years with Netflix during that phase.

Adam, what would you say? By the way, my oldest son's name is Adam.

No, make it easy.

But my brother's name is Alan. So that's why I started off with Alan.

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How did you find when you since you're you operate systematically. Every time you had you just went through a whole bunch of skills that you had to learn. And the great thing is that you did learn them and put you in a position to be able to supervise people who are doing those things for you down the road. But what was the most useful method or approach you took when it came time for learning a new skill? What would you say? Was it getting on YouTube and looking at videos, getting books, listening to podcasts? What was the most useful go to move to get you going to get get those skills under your belt?

When you talk about the tactical skills, the blocking and tackling skills like building a website today, I mean frankly then I just spent time doing it and I just you just figure it out today. I treat that differently because there's so much content. So my go to today When I have something I'm trying to figure out is I Google it and there's 15 people that have shot a YouTube video on exactly how to solve whatever that is. Whether it's some super technical code related thing in a system or it's how to pull the oil filter or the air filter out of your 20, 22, whatever car. Like someone has made a video for everything. That's the hands down, the easiest thing, at least for me to go and reference when it's a tactical thing like that.

So you have this, you set this record, you're racing. And now talk about how you went forward from there to where you got onto shark tank in 2018 and then wound up selling out with a eight figure exit. So talk about that process where you wasn't just you anymore.

Yeah, you mentioned earlier that sort of transition phase. Everything can go to a certain point. And we reached that point in 2016, which was the $8 million year. Yeah, our business was very cyclical. We would be down in Q1, we'd crush Q2 because of father's Day and summer. We'd be down in Q3 and we would make half our revenue in the last six weeks of Q4. So we had these huge revenue swings. And at the end of 2016, I was so running customer service was so overloaded with the customer service needs that came out of running that much revenue in Q4 that in January, this happened. Actually in December, I took a dry erase board and I wrote out all the things I was doing on it, like website copy, pictures, customer service, like all the stuff. And I just started circling things that I shouldn't be doing, things that I was bottlenecking the company and its capacity to grow by my bandwidth doing this thing and also for not having the right person in a role doing that thing. So we hired our first person, which was a customer service head of customer service. And she started in, in January of 2017. And she is. It was amazing. Absolutely incredible. So we continued to grow. Shark Tank reached out to us, a casting producer reached out to us. They saw a Facebook ad or something, I assume it was a Facebook ad in like 2015, I believe. And we went through. It would have made far more Sense because in 2015 we did a million and a half in revenue or a million eight, I think. But we couldn't get on because I was. The whole point of this premise of the business is that I wanted to be able to operate the company from anywhere in the world with an Internet connection. So my wife and I traveled A lot like four, five, six months a year we would be out of the country doing all the things that we weren't able to do for the prior 10 years. And we couldn't do that Shark Tank because we were in Iceland and they wouldn't let me fly back just for the filming. That made them uncomfortable. I didn't know that in advance or obviously I would have planned differently, but. So they pushed us to the next year. They pushed us to the next year because they had too many beer companies. And eventually we get on. But it's in 2018 when we're a much. I mean we were a $10 million a year business at that point. So we went on the show, we had a team of four, maybe five, I think it was four. And we went on the show knowing that they were going to spend most of their time beating us up on why we didn't need to be there because we were an eight figure business that was profitable. And yeah, it was an epic experience though.

Yeah. And so trepidations going into it or were you excited to go in and tell your story?

Oh, we were absolutely pumped. Our risk or way that the risk pool for going on Shark Tank is they're going to make you look stupid. I don't care about that. That's an emotional response to a great business problem. So who cares? They're going to make the company look stupid. Who cares? You're small relative to the big scheme of things. Like, so what? The big risk is that you go and there are two big risks. The first of the two risks for a company going on Shark Tank if they don't have the systems in place to handle the traffic that they're going to get from airing on that show that can burn the company to the ground. That's the most dangerous risk of going on Shark Tank is if you just literally don't have the pieces in place to handle it. That was not an issue for us because we were big enough. Our systems were incredible. We, that was not a problem to us. The risk was what happens is we film in June. You, you don't find out if you're going to air until 30 days before your episode. The episodes don't start airing until November. So that whole time you're supposed to be building up inventory, which is expensive. I mean, it's just cash sitting somewhere. And you don't know if your episode is going to air in November or if it's going to air next April or your episode might not air at all. And they hold that over Your head when you go into the show of. If you come on the show and you do a deal and then you kind of blow all the judges off, we are not going to air your episode. We tape more than we have room for. So how we mitigated that risk was we found out about a month before our taping that we were going to have Alex Rodriguez as a guest judge. And we figured that if we could get Alex Rodriguez throwing a ball as part of our demo on national tv, there is a next to zero percent chance they are not going to air that episode. So we rebuilt our whole pitch around, like, a carnival game that we made up and, like, built a little frame thing with bottle keepers lined up so we could have Alex Rodriguez get up on stage and throw a baseball at a lineup of bottle keepers to show that the glass didn't break. And that was us mitigating the risk against not airing on tv. Yeah, and it worked. I mean, it turned out we did a great deal. We got what we asked for was a million dollars for 5% for both Mark and Lori. It was a really dynamic episode. The way they edited it was a really dynamic episode. Most of it was them just beating us up for being there. And they used the promo of Alex throwing the ball. It was like part of their promo reel, which is exactly what we thought would happen.

So that's fantastic. Now, who asked the worst questions for you?

Alex Rodriguez. It was wild. The stuff that came out of that guy's mouth, he just regurgitated what everybody else said in a less intelligent way. It was wild. I mean, it's fine. Like, he's not a professional investor. He's there to serve a role and a purpose. But, yeah, it was. He was a good baseball player.

So you found yourself, much like President Trump, trying to ask. Respond to a statement that Joe Biden made during the debate. It's like, I don't even know if he knows what he said.

I mean, it was an interesting experience. It's funny during the pitch, in hindsight, because you tape or episode taped for like, 55 minutes and there's no breaks. Like, you don't stop and redo. Yeah, it's just intense chaos. Five people firing questions at you the whole time. And there were. It got to the point where some of the things he was asking, like, we were just ignoring him. We were just responding to everybody else. Like, you couldn't honestly even answer some of the questions. It was. It was pretty funny. I mean, he was nice. It just. It was an odd sure position for him to be in.

Yeah. And so. And plus he's probably a lot smarter right now too. So with, with these exposures, he's. He's learning. He's on his learning curve too.

Totally.

But so you leave there, you got the exposure, you got the pr, you're a hit. And was it a surprise that Windpoint Partners came along and wanted to acquire you?

So fast forward a couple of. A couple more years. That was 2018. We got acquired in that deal closed in March of 2021. In early 2020. Really. Which is like the beginning of COVID Right, Right. We, Matt and I got to the point where we just kind of got tired of running the business. The business changed. I'm really good at and enjoy the early creative hardcore problem solving. Coming up with creative solutions to problems in ways that people don't think and solving solving issues in unique ways. That's the part about business that I really enjoy. We got to the point in the, as we continued to grow that we were spending more of our time with attorneys because we had at that point we had 40 plus patents which we had to protect in all these places. And we were spending more time dealing with that kind of stuff and spending money on that kind of stuff that I really didn't like doing. So the fun in the business and it was harder to acquire customers at that point. And anybody that's. That's been an E Comm for the last 10 years knows exactly why, but just it's a much more difficult from a paid media landscape to customers today. And certainly then, then it was the five or six years prior. So we had had potential acquirers come to us and kind of poke around that we just never really took seriously until then. And we started to listen to those. So we had a deal to acquire the company on the table and I got connected to a banker, an investment banker that had a relationship at Windpoint and they had just acquired Arctic Outdoors, which is a much bigger outdoor. I mean they're. They sort of follow. They did. Now they're doing very different things, which is awesome to see. But they sort of followed Yeti along. So this Windpoint had just acquired them and they were looking for other brands to put alongside Yeti. And we were a good fit for that because we had this amazing patent portfolio. They could eventually make our own their versions of our products. We had a more premium brand than Arctic just by the nature of what Arctic was. Our margins were great. We had a great retail business that Arctic couldn't have because of the way the margins were structured so we were able to. The beauty of that is we were able to work those two deals against each other to create a a really quick transaction and a better outcome that resulted in it not having a bunch of drag along stuff that lasts forever and and we were out of the company by the end of the year, which was exactly what we wanted.

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