Meet David Chitayat of Genimex

Protect your brand, product or invention from the hazards of consumer product launching and go from idea to product to big brand. With guidance from retail product design and development experts, Tracy and tom hazard. Get the insider secrets to put the right things in the right order with the right resources so you can out design, outsource and out profit your way to retail success.

Hey, product launchers, welcome back to product launch. Hazards and I have got a great introduction for you. I'm going to introduce you to one of my favorite referral partners, genomex. Genomex is the coolest company because they are like a single source that can help you all the way from prototyping, engineering and design all the way through to getting your product onto a shelf. Just getting it all the way through that process and making sure you can deliver. And I've got David to tie it with me.

Tracy, thanks for having me. I'm really happy to be here talking with you. I'm not a founder. The company is a family owned business and was founded by my father.

Your father?

Oh yes, 45 years ago today. The company is run as three brothers and I've been working in genomex and been a group CEO for about 15 years now. Wow.

Wonderful. I did an interview with you for one of my articles. You guys write some great blogs which I refer to all the time. And that's kind of how we kind of got introduced to each other. Not quite a year ago, but a little less. I've been super excited about working with you and sending clients your way because you guys are one stop shop and there's so much of the development process that needs to get managed. Can you tell me a little bit about the scope of services of what you guys provide?

Sure, yeah, I'd be happy to. Predominantly, we're a contract manufacturer. That's the focus of what we do for our clients. Manufacture products predominantly. Also in China. We have offices in Taiwan and in Shanghai. We do have a turnkey service in that we support our clients in their product development, engineering and design, bringing those products from concept to actually manufacturing. Our focus is mostly when it comes to development is on more of the back end side of design and engineering. So we call it DFM work design for manufacturer where we take typically concepts that have an opportunity in the market and we help take those aesthetic designs typically and execute them through engineering and get them ready for manufacture.

Right. And that's why we're great partners because we do more on that aesthetic and product planning side of things and research about what you should make and then figure out what it should look like. And from there you guys figure out how to make it, how to make it really cost effective, who should be making it for you, what processes you should use, and then dialing that in so it's as good as it can be. And I think that's such a critical part of the process.

Exactly. That's our focus. There's so many places where companies and brands can spend their time in growing, like developing new products for their business. We add to those resources, we support those resources when it comes to development, where we can kind of tie in the whole manufacturing side of the development process. So that you're not designing in a vacuum, that you're designing with some knowledge coming from the manufacturing side. Do these concepts make sense? Will they be able to execute what are the costs and the basically cost benefits for some of those decisions you're taking into that into account. And that helps reduce risk and increases the speed at which you can then enter the market with that new product.

Right. And really it's about speed nowadays in retail. I mean, that is what we're seeing. Whether it's on the shelf or online doesn't really matter. It's like if you're behind the curve getting the market because you didn't get the price right, you didn't get it made right and you got to redo, that puts you at a disadvantage.

Exactly. And our clients also have a lot of things going on. They're spending time developing their business, selling their product, communicating with consumers. They may have very aggressive product development schedules with lots of different products that they plan to bring to market. It's hard to do everything in house. You can also outsource to other partners and that's how we mesh basically or integrate ourselves with our clients. Because typically we have a very long term relationship with them. We understand their business and then we cater our services to understand around their needs and their category of products.

Yeah, I think that the category experience, this is something that I was just on the phone with a potential client earlier strategy call and we were really talking about that. That sort of having category experience is tremendously valuable nowadays because whether or not you're sharing that exact data, it's informing your decisions. Oh, if we don't get that price lower, it's not going to work. If it doesn't have this baseline feature functioning extremely well, it's not going to sell as well. And we provide those information those of us who have category experience. And that's hugely valuable.

That totally makes sense because you want to know what's selling well, what's doing well in different markets. And that's an area that we can actually help on too. We don't really go into the market and understand what consumers are thinking, but we can do back end sort of support where we like. We can go into the factories and say, like, which SKUs are doing well, what materials are new, what are some new innovative ideas around a product category that then can inform a marketing team or creative team like yourselves and pushing the limits, adding on incremental innovations on those ideas.

Yeah. So you're big on telling stories because you got a lot of history of stuff that doesn't work and stuff that does. So I'm going to tell a quick little story, but I'm sure you're going to have one to match it that's probably greater. But I interviewed a company, I told this story, I think on the podcast before, but I interviewed a company who's making socks and they were brand new to the category. They thought that it was great. They went to this sock manufacturer that they were very confident about in Asia, pretty sure they were in China, and they were really confident about it. And their goal was to make the softest pair of socks. And they were men's and they were like cool and patterny and bright colors. So they wanted really bright colors and really soft. And this is the only criteria they gave the factory. And then they designed them together and all of that and gave this criteria and kept refusing samples. So they got the ones that were softest, they bring it out to market. I'm interviewing them, they send me some samples for review. My husband wears them for like two days, washes them a couple of times over the course of a week and they fall apart. And I took one look at it, which I hadn't really looked at because the sock was in a pack and I just handed it to him, say, hey, try these out, tell me what you think. And so when I pulled the sock out and looked at it, I went, I have category expertise in knitting. And I looked at that and went, well, I see why there's a hole. It's because your yarn length is too long and the areas at which there's the greatest wear, plus you have kind of a little seam which creates an abrasion point. I just looked at that and went, oh, well, why didn't your factory tell you? And unless you have that collaborative relationship like you have with your factories that we have with ours when we work with them, you don't get to that point at which you have the conversation where they're going to come back to you and say, wow, I don't think that's a really good idea. Right. Because you're not having those conversations. They say the customer's right and the customer said they want it this way, so we're going to make it that way. So you and I know that we have to open up that dialogue because our factories will tell us this isn't a good idea, but they won't tell everyone.

That's true. I mean, it's interesting that, I mean, what you've said, like, about focusing on just one feature and not thinking about the entirety of the product and its actual functional use. That sort of problem comes up all the time, especially with clients that have less experience. I'm pretty sure that client won't do the same thing again. No, it can be inexpensive or at least time consuming. Error. And can be expensive. If, let's say, if it wasn't such an obvious problem and was something that was related to more high levels, heavy usage and stuff like that, that you were to go into production and only find out from consumers three months down the road or whatever the timeline is, that there was a disaster. I mean, your whole business.

Well, especially electronics or something like that, or some battery issues. As we've heard, big companies make mistakes with batteries all the time. So, yeah, I mean, it can be really costly, really time consuming. And in this particular case, it was about a $20,000 issue for them because they were like, we can't sell what we have or we're going to end up with bad reviews. So they had to pull all their inventory and it was almost like relaunching again by the time they got it. So they were lucky that they hadn't really gone full launch. But wow, what a delay and what a capital cost. Right.

I didn't know that they actually went into production. I'm sorry that they had to learn at that point. Ideally that this stresses the need for not rushing to market without testing your product before you launch. It's one of the critical steps in bringing a new product to market. And one of the things that people like yourself and genomex, one of the things that we do that we help, I think, guide our clients into good.

Project management sort of practices and processes.

Exactly. And those things, I mean, those things sometimes are so simple. However, they have immense, huge consequences that if you don't do them, if you don't test your product adequately before you go into production, you have a problem.

Yeah. You were talking about brand growth before and that got me really thinking about how important the systems and processes and documentation is. Right. Because you've been doing this so long, you have sample review documentation. I'm sure sample request documentation. I'm sure you've got a whole set of forms. So you're in a way setting in good practices. So eventually, if your team is building a team in house for a client as well in the future, you've set up these good practices along the way of what the paperwork should look like, what the system should look like. So some of the development they can take on on their own, we do that as well.

So yeah, and we do have those that good practice in house. When it comes to stuff like sample reviews, it extends to the general product, project execution, how to launch a project correctly. And our clients really come from different levels of expertise. I mean we work with Fortune 500 companies. It's down to startups that are just entering single person startups that are just Kickstarters.

You guys have a lot of Kickstarters?

Exactly.

We work with clients with different levels of infrastructure and expertise. So sometimes we're working within our client system, sometimes we're managing up and helping our clients. We manage the projects with them and we encourage certain types of project management techniques. We tell them when to come to China and review things and we work with them on the process and setting up standards and things like that as what we see is that with those clients that are typically entrepreneurial, great learners and they develop quickly and their business matures and their needs change over time and we move into less of like managing up sort of situation and more into like expanding the line rapidly or growing the business, helping them grow their business. Right.

Yeah. And that's just we're here about the right things in the right order with the right resources. And it's that order of process that it's different in every trajectory of growth plan. So at the startup stage it has a different order than it does when you are at that advanced Fortune 500 brand stage. Right. So having the capability of scaling from the way that you work is great. But at the same time, what you guys have that I really appreciate are these fabulous practices for quality control, for design, for manufacturing. Like you're doing all of these things so that they don't have to be redone later. That's why that right order matters.

Yeah. And our attitude towards quality is, I think it's a simple idea, but it makes a lot of sense in our experiences that quality is not one step. It starts from the beginning of when you're designing a product and when you're selecting that manufacturer, that's probably the most important part of ensuring that you actually have quality goods. At the end, you have to think about setting up very clear, established standards, good communication of those standards throughout the supply chain, so that it's very clear requirements that everyone's working towards on the same page. And. And then you eliminate 95% of the issues. There's still going to be 5% of problems that you couldn't anticipate or more hopefully not.

But it happens.

You find those things that are harder to find but still very important and you're solving for them and you're not dealing with like a nightmare sort of disaster scenario.

That's right. So, yeah, I agree with you that quality and price are designed in like, that's kind of our motto in it, that if we don't do a good job from the beginning, understanding how it's going to be made, understanding how it needs to be priced, then it's really hard to be great at quality and great at price. And so the only thing you can do is to redo later. And that is a costly and expensive and time consuming proposition. And you repay and you repay for it. It's really what, in the end, it costs you more.

Exactly, yeah. I spend a lot of my time thinking about how do we reduce the risk of projects, what kind of tests, what kind of prototypes can we make, what questions should we be asking, which sort of technical issues should we be digging into in order to basically check boxes that reduce risk for our products? And so we spend a lot, our team, we spend a lot of time thinking about that. We try to encourage our clients to think in that way as well. And what ends up happening is that we end up being. Might sometimes take longer to start the project, but then we actually deliver earlier. Right.

It accelerates later. Right. Better planning, faster delivery. That's how I always look at it too. Yeah. You know, one of the things that I enjoyed so much about our conversation we had, we did an article on sort of like Chinese New Year and like the timing issues of things. It's like having a sense of like, what's going to impact your timing is a direct impact to budget as well. And having that like this is not the best time of year for you to be doing this product and just knowing that from the get go, you're always proactively thinking for your clients, for the projects and advising them and saying you got to get your orders in now because if you don't get them in, you're not going to get them and you're going to be out until spring and things like that. So how do you keep on top of that? I mean, you guys are not a giant organization, but you're big compared to my small team. So tell a little bit about how that works for you.

Well, I think the first thing we focus on is trying to understand what our clients requirements are, what their needs are. So we have to work back from that. So we try to ask those questions up front. When do you need a launch? What's your goal? Is that set in stone? Why do you have that goal? We understand, for us it's always about trying to understand why. Why do you want to do that. Sometimes people have arbitrary goals, so then it's maybe not so important. Maybe they have, they're planning a huge event, they must have the product ready for that event, a trade show or some other kind of event that is fixed in stone. There's no way to work around it. So we understand the requirements and that's the most important thing. And then we try, then we assess what do you want to do and that's again more requirements. But that's not schedule, it's just product. What are the things that you want to do? That's not clear. We try to help them, guide them through establishing that and putting that down in writing. Sometimes we get instructions orally and things like that. And it's like, oh, everything's clear, right? And I'm like, yeah, it's clear, but is it really going to be clear three months from now when we go back and we say, I thought you said this, but I'm not really sure. So we put it all in writing and we have a big team. We got to make sure that everyone in the team kind of has access to this information in a very concrete. And we don't want messages to be passed between people and also then to suppliers or quality control personnel and things like that where maybe it gets lost in translation and literally is translated too.

Yeah, yeah, that's so true.

So we focus on understanding exactly what they want to achieve. And then we go and manage expectations and say like, look, based on our experience, these things that you want to achieve, possible or not in the time that you have allocated. And this one, yeah, maybe it's possible, but there's a risk of this might delay the project. So maybe we should reconsider some of these requirements or your schedule, one of those two things. But you have to understand where the risks are and what we think we're 100% confident we can do what we may have a chance to do and what we for sure can't do. And so we try to set those expectations clear in the beginning. It's very hard for us because we don't always know what's going to happen. So we try to.

Because it's not fully defined yet, right?

It's not fully defined yet. And I think, I'm sure it's your experience too. There's always unexpected sort of issues that are going to come up, unintended consequences for decisions that we can't anticipate what's going. So we have to build in buffers and we have to be conservative.

Yeah, yeah, absolutely. And it is in that not rushing process though, and having those buffers in there that give you that comfort level that we can accomplish this and accomplish it. Right. Because rushing is always. You add too much risk in the process.

One other thing we do, for example, for projects that are extremely time sensitive or have high risks of failure, I like to take the approach of parallel path sort of problem solving, which doesn't require more resources and it takes up more time. So we have backup suppliers. Typically we may be parallel path to set different techniques for manufacture, parallel path prototyping with multiple suppliers. When we do that, it's more expensive. But my experience, we obviously always judge, like the cost to do it versus the risk and try and see what. I like to err on the side of caution because things, if something's gonna go, I don't know, there's a saying, something could go wrong, it will. Or however you say that. Yeah, that's our everyday experience. And so we have to have backup plans and we have to be adaptable and be able to pivot quickly when something's not going right. And that's always the hardest thing for us and for our clients to do is that we run into a challenge, we run into a problem. Do we keep trying to just power through it and solve it or do we say, look, this is not a good path, we need to change the path. And that's such a hard decision to make sometimes. And sometimes it seems like it's more costly, time wise or resource wise, to change direction. Sometimes that is the best. Like cut your losses, change direction and just solve it for good. That's a hard decision to make and one that you kind of sort of, you gain with experience.

Yeah, absolutely. I totally agree with that. The amount of experience you guys have is amazing. Now, you said you're one of three Brothers who run it, what are your other brothers do? And so I can kind of get a scope for it. Is one of them over in China all the time?

Yes. Jonathan Chatayet. He's in Shanghai. He's our China CEO. He runs basically operations for China and Taiwan and so he's managing the team from a day to day and like interacting with clients, factories and this is the whole basically the operational side of the business and he's the brother that's on the ground. And in addition to him of course in China we have a strong team of senior staff there. He's in charge with the operation there. Our other brother, Talchettai, he's in New York actually. He doesn't actually have a direct operational role in genomex at this time. He used to many, many years ago he started an internal startup with some consumer brands and he's managing that business today.

He's got a little side project. Love it. You know what I think though that's really valuable because now you've got information on what it's like to be a startup. Today it's very, very different. Right. And what those issues are and what they're surrounding. So what makes a really good client for you, David? I mean do you just take phone calls with anyone? Like how do you evaluate them? Because there's going to be some people out there going am I right for genimac? I like David, everything sounds really good. Yes, yes, yes. But am I right? And so how can they evaluate themselves or how can you evaluate them?

Well, that's a tough question to answer because I think there is a broad range of clients that we do work with and we're very happy working with. We look at the long term sort of viability and the relationship with the client, the potential there. That's the most important. We don't look at individual. We don't really work one off with clients very much. And that's. Or if we do, that's really not our model and not what we're interested. We're in like a high volume, low margin business. So we need volume, we need repeat business for our model to work.

So you're looking for brand builders, brand growth, that kind of thing.

Yeah. And ideally we're looking for clients where we add a lot of value. If we don't add value to a client's supply chain then it doesn't really make sense long term. So we look for clients that value the services like value development, support. They value high quality of service. They value. Maybe they have complexity in their products. So therefore they need more management. They have complex supply chains or they buy different types of products and they need like one point of contact to consolidate a supply chain. Those kinds. They have maybe requirements of speed to market things that basically say, like, hey, there's a lot of work to be done here and you guys are actually going to add a lot of value to our supply chain. And that's where we're going to, we're going to have a long term relationship. And that's where I think that there's a lot of potential. Where we don't add a lot of value is in like, let's say someone says, look, I have this bucket, it's a plastic injectant bucket. I just need 10 in a box. I just need it to be as cheap as possible. There's no complexity. Like it's just a total commodity. There's nothing to it. We can do it, we can be very competitive. But honestly, it's just a price game and there's not a lot of risk and not a lot of service involved and we don't really add that much value. And so I'll say we'll do it.

But we don't have a lot of those on this product launch platform because your listeners out there and viewers, you are inventors and you are entrepreneurs building brands. You, you are Amazon sellers who said, enough with this wholesaling stuff, let's start making our own brand, let's start making our own products. And so you've already got that sort of sales growth underneath you. You're great at the marketing. You just need somebody really help you amp up that product development and get great products in. So that's the kind of people we have right here on our platform and we're really proud of all of that. So I think they're really right for you, most of them. So that's really good. So now you do sort of an intake evaluation and that's all available. And Ana Pappas is on our plat. You can contact her directly. All the links will be in the post or this episode and you'll be able to just go straight through or send her an email, see what they think. She'll be happy to help you and look at that as it, see if it's a fit. So David, before we go, because this is what we end every one of our intro episodes, sue, you've got to have a great story of the hazards, the single Z hazards of product launching. You've got to have a great story there of some of the things that have gone wrong, the really good gone wrong things. We'd love to hear one.

You're like, which one?

Well, I have a lot. I have a lot. And I can tell you ones that ended well. And I can tell you ones that didn't end well.

Let's do an end well one. We could use a happy ending. Yeah, let's do a happy ending.

Most of the stories end well, but the ones that didn't end well, those are the ones I've learned the most from, I think probably.

Yeah.

Yeah, I'll leave that. I'll get too depressed. So, yeah, we had an experience. This is to do with factories situation was actually a vacuum cleaner that we were doing for the automotive industry for a brand that sells into major retailers like Walmart and things like that. So. And it was an autovac for cleaning cars. And we had a good supplier that was actually making the product. We've been doing it for a while with them, but we got news that they were under the group. They were part of a group in China and came under some kind of financial trouble. They had too much debt with some of their other companies. I don't really know the nature of all the exact details.

Stuff like that happens all the time. Product launchers. I've had it happen in chair industry and other industries. So it happens all the time.

Yeah. So. And we got that news from our guys on the ground that were in the factory that we're doing some inspections on some products that we're shipping out. And we kind of got some wind through the grapevine that something was going on. We then our account manager and myself, we basically dug into it and we were like, all right, these guys are in trouble. Like, there's some serious issues here. We're talking to. They were not owner managed. This is a pretty big company, was professionally managed. And so you get a lot more honest information from professional managers, because they're probably gonna get. They're losing their job at the same time. And we went inside into the factory, and we were working with them to basically pull the tooling out for this project so that they wouldn't go bankrupt and then go into receivership, bankruptcy court. And therefore we would have everything locked down by the local government. We had to negotiate with them then also with their sub suppliers because not all the tooling was in their actual factory. Some of the components were outsourced to other suppliers. We had to go through and negotiate with everyone, find an alternative supply chain, another factory that we could then move everything to, and then quickly move into production there. It was pretty tough because we were dealing with people that had to agree to do things that maybe weren't the company's necessarily best interest because if they were to move all the tooling out, they lose all their business and they are in more desperate financial condition situations. So. But we were able to manage it. We had to pay some unpaid bills, or not unpaid bills, but new bills that came up that didn't exist prior to this discussion.

I know exactly what you're talking about.

But the people there were overall good and they were actually honest. And we moved the tooling out and we moved production to a new facility, quickly ramped things up, went through some of the approval and testing that we had to do. Air freighted a couple containers for our client. We paid for that. And the promotion that we were working on for them was the costco promotion. It was a test order that actually, because we did that.

Product launches, you cannot miss your timing. You miss your timing, you will not get back in. So, yeah, so the great thing was.

That the test actually went well. Could have been like we did all this stuff, spent all this money and like it didn't go well. It went well. They followed up with 150,000 units that we produced for costco and we ended up getting a chance to make back some of that money that we lost in that whole process. And the client, we still work with them today. We've been working with them for like 20 years. And so that one ended well.

But yeah, you touched on things that happen all the time.

Right?

Ownership of tooling, it needs to be clear. And then even still it'll be a negotiation when the time comes. How to quickly pick up and seize a tool if you need to. I mean, there's so many little things that having someone who's been there and done that again and again and again is so valuable. And that's why you are one of our right resources here on product launch hazards. And we're really happy to be in partnership with you on that. So thank you so much for joining us, david. We really appreciate it and we're so glad to be partners with genomex.

Tracy, thank you so much for having me and thank you for all of your support.

So product launchers, you can find all about genomex. You can meet david and anna right on our platform. Don't forget to go to the blog post and you can link through straight to that. Thanks again, product launchers. Talk to you soon.

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