Andrew: Three questions before I fire you up with another great interview. First, if you need a video for your site to help increase conversions and make more sales, who do you turn to, Revolution Productions. Their videos make it easy for customers to understand their product, and even though they’re inexpensive, Revolution Productions uses animation techniques and high quality video production values to tell a compelling story, and Revolution Productions is trusted by SendGrid, SnapEngage, Freelancer and others. Go to revolution-productions.com.
Next, did you know that adding a phone number from grasshopper.com to your site can increase your sales? Well, Less Accounting found that sales grew when they added a Grasshopper phone number to their site. Seeing a phone number for help makes people feel safe. Flower AB tested having a phone number on their site from Grasshopper and not having one from Grasshopper. Look at how much impact it had. Try it on your site. Go to grasshopper.com.
Finally, will you trust me if I tell you that the lawyer that Entrepreneurship used is Scott Edward Walker of Walker Corporate Law? Well, what if Jason Calacanis, Neal Patel and these founders tell you that they recommend Scott Edward Walker of Walker Corporate Law? Well, you don’t have to take our word for it. If you’re a start-up founder who is looking for a lawyer, put a call in to Walker Corporate Law and talk to them. You’ll know for yourself, walkercorporatelaw.com.
All right, let’s get started.
Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart, the place where hundreds of entrepreneurs have come here, hundreds of proven entrepreneurs have come here to tell you how they did it. In this interview, I’m going to be answering this question, how can creating stainless steel capsules change founders’ lives forever? Dave Jackson, who you see on the left, and Dave Petrillo, who you see on the right, are the co-creators of Coffee Joulies. They are coffee bean shaped stainless steel capsules that you put in your coffee and they keep your coffee at just the right temperature, and there they are right there. Dave Jackson has got it in his hands. Welcome guys.
Dave J: Thank you.
Dave P: Thanks, Andrew.
Andrew: So those little beauties have done how much in sales?
Dave P: Last year we did over $600,000 in revenue between Kickstarter and our Shopify store.
Andrew: $600,000 in revenue. People are buying those items, what you just showed in your hand there, coffee joulies. They’re putting it in their coffee cup when they pour coffee and what happens exactly?
Dave P: So the idea behind it is to help regulate temperature of your coffee while it’s in your coffee cup. I use mine in my travel mug, when I pour in coffee, black coffee that’s really hot, Coffee Joulies take the extra heat out of the coffee so that it gets to the perfect drinking temperature almost immediately and then they actually release the heat later so it stays in the perfect drinking range for twice as long, and depending on the container, it could be hours, all day.
Andrew: All right, well, all day it could keep it warm?
Dave P: Yeah.
Andrew: Oh wow.
Dave P: Definitely.
Andrew: You mentioned Kickstarter. That’s where you guys raised money and you told me before we got started that when a blog called Uncrate featured your Kickstarter program as you were raising money, you did something. Can you tell me what happened at that time, and then we’ll go back in time and tell the whole story of where the idea came from and how it developed, but I thought it was an exciting moment for you, why?
Dave P: Well, what I was telling you about was when I first saw our blog post pop up on my feed on my work computer, I was sitting behind my desk. I had other stuff to do, but I knew that Dave had been emailing blogs, and that was one of the ones that we were trying to get on, so I keep this little feed on the side of my computer and watch it for stuff that popped up and I was sitting there and Coffee Joulies popped up with Uncrate underneath and that was when I sort of knew, all our eggs were in that basket and we were thinking if we could get picked up by a blog, it’ll be like a landslide from here and when I saw it pop up, I basically just kind of melted in my chair, sat there for a few hours and watched it spread around the Internet, which happened in only a few hours. I think I texted Dave, “stuff’s happening,” and that kind of kicked off a few days of me doing absolutely nothing at work before I quit, just watching our numbers go up.
Dave J: And reloading the whole page on the phone on the car, in the car, trying not to crash everywhere we went. I was pressing the reload button.
Dave P: I didn’t drive very, very often then because I got in the car and went somewhere, and I would pull over to check something and then 20 minutes later I’d be like, what am I doing? Where am I? I don’t even know where I am.
Andrew: And Dave Jacksonâ?¦ No, go on.
Dave J: We had three blogs that we emailed hoping it would just be picked up by one of them and ended up being picked up by Uncrate, Gizmag and Gizmodo, all within the two day period and the fourth blog I was going to email, Techcrunchers blog Crunchgear, by that point they’d already picked it and at that point it was viral.
Andrew: All right, I’ve got a note here, Dave Jackson, to come back and ask you, what you said to those bloggers that got your story picked up because I talk to a lot of entrepreneurs who struggled to get anyone to mention them and here you got three of the biggest blogs, the ones with a lot of impact, to not just cover you, but to also, of course, send you customers. When you were looking at those numbers, Dave Jackson, these are numbers of sales that were coming in, people who were going to Kickstarter and saying, yes, I will fund your project, and of course, when you launch I want, I want one of these. That’s whatâ?¦
Dave J: We were funded in 2 and 1/2 days.
Dave J: We were funded in 2 and 1/2 days. We were looking for $9,500 and we reached that in 2 and 1/2 days, and by the end of the 37 day period that we’d set we were at $306,000.
Andrew: That’s May 2nd you guys hit $306,944. That means there were a few people who gave you a buck each, to just say, eh.
Dave J: Very few of them gave us $1 each. Most of them gave $40 for the 5-pack. We did three different tiers, which we actually planned pretty strategically looking at past projects that were successful. So, 4,800 customers received some form of Coffee Joulies at the end of this.
Andrew: All right, so as I said in the beginning, this is the site where Mixergy is a place where proven entrepreneurs come to tell their stories so that others can, can learn from you and can then go out and build their own success stories. So let’s go back and see where this all started. Where did the original idea come from?
Dave J: Dave had been working with phase change materials for a little while, coming up with, like, products and he and I always over G Chat.
Andrew: With what kind of materials?
Dave J: Face change.
Andrew: What is a phase change material mean?
Dave J: It’s just is something that melts at a specific temperature, like, water is a phase change material. It goes from ice to water at 32, from water to steam at 212.
Andrew: I see.
Dave J: But you can get phase change materials that melt at basically any temperature you want. I knew this and I had been looking at it for a whole bunch of other products.
Andrew: Like what? I want to stay just a little bit on this because there, there’s something interesting that you guys did that other people wouldn’t have done, but let me understand, what other products would you have created with this phase changing material?
Dave J: Well, I can’t talk about too many of them.
Andrew: Because you plan to build them.
Dave J: Yeah.
Andrew: Give me a sense of the kind of things you were talking about, or you were thinking about?
Dave J: Well, you can think about what phase change yields are used for right now. I mean, just think about all the different uses for ice and they’re not optimal at all. I mean, you put it in your martini and you shake it up and you pour it out but your martini’s still, it could be colder, you know, but ice is used all over the place and people understand that. I think that’s one of the reasons why we were able to get this across to people by referring to ice in your soda. This is similar, but it’s, like, special ice cubes that are made of stainless steel for your coffee.
Dave J: And that’s one of the reasons that people can relate to it.
Andrew: All right. Let me ask you guys this. Here’s why I wanted to spend a little bit of time on that. Where in the world where we’re watching software entrepreneurs, iPhone app makers go from idea to millions of users to in Instagram’s case, a billion dollar sale. You guys are watching these guys who are producing nothing tangible and instead of saying, look at how great they are, we’re going to give up on this idea that we’re going to create stuff, we’re going to shift towards software. Instead of saying that you said, no, we’re going to stick with stuff. Why didn’t you give up on the idea of producing stuff in this world where bits and bytes seem to rule?
Dave P: So, the original idea, once we were done, or once we had been talking about phase change materials for a while, I said to myself, you know, silver, or stainless steel, or metal coffee beans regulate the temperature of coffee. I think it’s a good idea. I would want to use it. I bet I could get some people to buy it. It would be kind of a high-end product and so I told Dave one day, you know, I really, really want to make something happen. I need to make some money. I want to get out of this job. I had to decide.
Dave J: We wanted a million dollars. That was it.
Andrew: Was the million dollars, by the way, the number in your head?
Dave J: Yeah.
Dave P: Yeah, it was.
Andrew: Sort of.
Dave P: It was just kind of a joke, but we, I wanted to get out of it. So I said, “I’m going make this coffee bean thing. I already know what it’s going to look like.” It didn’t take that long to dream up. It was just something that popped into my head. One of the concepts of lean manufacturing is that the only thing that really matters, which is what I was studying at the time at work, is what the customer is willing to pay for.
I kind of applied that to a start-up sense and said, “I think this idea is good, and maybe another inventor or somebody that I tell it to may have a different idea of whether they think it’s good or not.” It doesn’t really matter because we’re all just guessing. I’m pretty confident in my guess today, which means it shouldn’t change until I can really test my guess out, give these things to somebody and see whether they’re willing to give me money in return.
I said, “Do you want to help me out on this? We’re going to team up. Let’s make some Coffee Joulies, and let’s put them in some people’s coffee cups, and only at that point, however long it takes, will we decide whether or not this was actually a good idea.” That took eight months to do. It took eight months to build the first prototypes and get them out.
Andrew: That’s why I’m asking that question. Eight months would be an insane amount of time in this world of lean start-ups, build your software in a crappy version, get feedback, iterate, iterate, iterate. Why didn’t you guys give up on it on tangible things with that in mind? Were you so passionate about creating something that you can touch, something that you can hand to someone, was that what it was?
Dave J: We would have made the mistake of studying mechanical engineering at school, which is why we’re sort of stuck in this arena.
Dave P: I can’t make anything on the computer.
Dave J: Everyone looks at Instagram right now and says that was so easy to do. First of all, no, it wasn’t. Second of all, that’s one app out of a million that has done well. What happened to the other ones? They just disappeared into obscurity. We’re still around because we have something that you can hold in your hand, and our product will be relevant when you’re drinking coffee in 30 years and will still be functioning in 30 years. What’s going to happen to that latest app? Where is Instagram going to be in 30 years? They’re not going to be doing what they’re doing now.
Andrew: I see.
Dave J: And also, what’s the market size?
Andrew: This is your passion. If you hear a story about someone else doing better with whatever their passion is, you’re not going to jump on that passion, and then if you hear another story about someone else’s passion . . .
Dave J: Passion bandwagon.
Andrew: You guys are in this. You’re not in this business necessarily but in the tangible product creation business for the long haul.
Dave J: You can see that this is a very simple thing that we came up with. It’s two parts: it’s a stainless steel shell, phase-change material on the inside. There are plenty of other things out there left to invent. Software is not the only place to innovate. Everyone else is distracted by software, so now we get to run around with all the new technology that comes out from everything else and apply it to consumer needs. It’s pretty easy to carve a niche out.
Andrew: I’ll come back and ask you how you get things manufactured and how you make sure that you can get it created consistently, because I think that that’s something that we don’t really talk much about. We’re assuming that everything is software on Mixergy anyway.
Dave J: Right.
Andrew: I want to learn how physical products get made. Sorry. Dave Petrillo, you were starting to tell me about where you took this idea.
Dave P: We said, “I don’t know how long it’s going to take to make the first Coffee Joulie.” I had an idea of how we could make it, and I knew what I wanted it to look like in the end, but I didn’t know how complicated or how easy it would be to make. I thought it would be pretty easy because it’s only two parts. I remember telling Dave this is the simplest idea I ever had. A lot of hackers and people who are designing things in the space of tangible goods or the combination of tangible goods and software will make a GPS-based widget or something like that, or a motorized something, and they have a lot of moving parts that really complicate it. I said, “I want to do something that I can do in my spare time and keep my full-time job, and this is the simplest thing that I’ve ever come up with. It’s just a coffee bean.”
We also set forth this idea that we’re not going to stop until we get our first thing out there. It doesn’t have to be perfect, but we’re going to get it out there. We’re not going to stop until we do. It was a side project, so we didn’t work on it full-time. I restricted the budget to $5,000, which we didn’t go over. We were really careful with our time, really careful with our money, and it just turned out that it took eight months. If we did it over again and we were doing it full time and we had a little bit more of a budget, we could probably get it done in a few weeks. That’s what it took to make the prototype.
Andrew: What happens in those eight months as you go from idea to prototype?
Dave P: I was just figuring out basically what the easiest and cheapest way I could possibly make a Coffee Joulie look like a Coffee Joulie while testing all the things that needed to be tested to make sure that it was going to work and that there weren’t any fundamental issues that we had to overcome or that were going to stop us from getting to the Coffee Joulie stage. We did performance testing and made sure that the thing worked like we thought it was going to work, and that it had a compelling story and that it was fun to use in your cup.
I made little prototypes out of Baggies filled with the material and had them in my coffee for months. I then built a shop in a spare bedroom in my apartment and built all of the prototype tooling, had it machined at a local machine shop, sanded it smooth and made a couple prototype tools. You can pay somebody to do now, I know that, but it was more fun to do it yourself and figure it out on your own. I ordered a lot of jewelry-making equipment that is good for making one-off parts, and made the first couple of prototypes, and then we had a handful of them.
Dave J: There’s also the part of filing IP to make sure that we can actually talk about this in public. It’s unique in the U.S. that we can write a provisional patent which lets us have basically a year to figure out whether this idea was any good, which fit into our plan perfectly. I could write this myself. We spent $110 to file it, and then our foot is in the door in USPTO, in the Patent Office, and we have a year to decide if this is a good enough idea for us to spend $20,000 to get it patented.
Andrew: How do you that? How do you file a provisional patent on your own?
Dave J: There are books on this. I took a class at Stanford that taught me how to do this. Actually, our patent attorney right now is my professor from Stanford who taught me how to write a provisional patent. Basically, you talk about how to make this invention and what is special about it, and that’s it. The whole point of patenting is you’re sharing with the world how to make something, and because you were so nice to do that, we give you 20 years to sell it by yourself before you have to share it with everyone else. So, I was just sharing with the world how you might make some Coffee Joulies, and then we get a year of protection from that to decide whether we want to file fully, and that would give us a year both domestically and internationally. In that time, we were on Kickstarter, and it became clear that, yes, we were going to file a patent on this.
Andrew: Dave, for the person who is listening to us who wants to file a provisional patent and didn’t go to Stanford and study this the way that you did, is there a way for them to do it, to file a provisional patent that would give them a year to explore their idea before that?
Dave J: There are probably 20 books that you can go out and buy and just follow it step by step. There are books you can follow to write a full patent, let alone a provisional one. We had a patent attorney do that because we were busy doing other things, but no one needs to spend the $20,000. You can write the whole thing, and it’s good to have a lawyer help draft up claims, but that would be my best advice. I’m not an attorney, and I don’t want to go out giving legal advice, but it’s a straightforward thing. I think our provisional patent came out to be about 4-5 pages. I don’t think we even had any drawings in it. It just took maybe, a week-and-a-half of my time just doing it carefully to make sure everything was right, then file it and move on to making the prototypes.
Andrew: That’s great to know; a week-and-a-half time, that’s not bad at all. I should say Kickstarter is where you guys raised money to help you guys get started. Shopify is the platform that you’re selling your product on right now, right?
Dave J: Right.
Dave P: Mm-hmm.
Andrew: You can go to Joulies.com. It’s on Shopify even though it looks like it’s hosted by . . .
Dave J: It’s hosted by Shopify.
Andrew: Hosted by Shopify, right? That’s how you and I met. I asked Harley who works over at Shopify to introduce me to some of the interesting stores there, guys who went from nothing to something big quickly.
Dave J: Yes.
Andrew: He said, “Oh, I know exactly who to introduce you to, Dave and Dave.”
Andrew: All right. You also said that you put the material into Ziploc bags? What is this stuff that’s on the inside that you put into Ziploc bags when you were testing it in your coffee at home before you manufactured anything and got jewelry-creation equipment, what’s that stuff?
Dave P: That’s a great question.
Dave J: It’s a secret.
Andrew: Oh, it is? So, it’s your own secret recipe of something that will retain heat and let it out?
Dave P: Yes. There are a few different chemicals out there that you can get that have specific melting temperatures. This is a combination that’s derived from plant sources. It’s completely vegetarian. It’s completely kosher. Safe even if these things would open, it would be OK to drink this. Dave’s eaten a bunch of it just for fun.
Dave J: Yeah.
Dave P: But that said, every single bean we test before it goes out the door using a military spec testing procedure to make sure there are no holes in it whatsoever.
Andrew: I see.
Dave P: The ingredients, we don’t advertise exactly what it is. We keep it a secret. It’s not really that complicated.
Andrew: You said you got some prototyping tools? What kind of tools?
Dave P: The process to manufacture the part that we used as the first prototype was basically making stamping tools which I designed because I had experience with injection molding and sheet metal design from work. That’s basically what I did as an engineer for a couple of years. So I knew how to pack them together. I had a local machine shop help make the tools where I actually would go after work for a couple of weeks and help rough out the blocks and set up the machine and then watch the machine run while it was making the first molds.
We took the first molds home, and they weren’t very good so I sanded them for another couple days, maybe a week, and tried to figure out how to get copper sheet, which is a common thing to do to test out your tools to make a decent looking part out of these prototype tools that we made because a Coffee Joulie isn’t really that simple. It’s a lot of complex shapes, and we had to get them to fit together just right and then seal the seam and all that stuff so there’s a lot of little, tiny things that we had to figure out which turned out to be really valuable because it gave us a lot of insight into what problems we were going to experience down the road in real manufacturing. It also lead us to try to, to kind of figure out exactly where we wanted to go to get our product manufactured for real in a production facility.
Andrew: I remember when I interviewed the founder of Clocky and she said that she had to find a manufacturer in China and the manufacturer she found wasn’t getting the job done properly, so she flew to China to stay by the manufacturing plant, to walk in every day, and to push them, and to figure out what the problems were. So she, and she obviously created Clocky, a great alarm clock that’s been doing phenomenally well, but she didn’t know where to get started and how to do it right. Now that you’ve gone through it, for anyone in my audience that wants to go through it and do it right and not make the mistakes that she did and some of the mistakes that you’ve avoided, what do you recommend they do to create the firstâ?¦
Dave P: There’s no such thing as avoiding the mistakes, that’s the entire part of the learning, learning process and what she did is the same thing that we did is go to the manufacturing facility and stay there and fix all the problems as they come up.
Andrew: How’d you find the manufacturing facility?
Dave J: I saw a How It’s Made video online for stainless steel silverware and actually, a hollow stainless steel, a stainless steel knife has a hollow handle sometimes and this is what the How It’s Made actually was about and I was like, that’s exactly what we need to make. Dave found them online and called up the company and got a call back from the President the next day and that was that.
Andrew: What was the company?
Dave P: The company is called Sherrill Manufacturing, but it’s in Oneida, New York.
Dave P: That’s the site of the old Oneida Silverware factory which was the biggest flatware manufacturer in the United States for the past 130 years, so the place that Joulies are manufactured is this one million square foot facility that right now is pretty much empty. Coffee Joulies are pretty much the only things being made there. The facility is no longer owned by Oneida Limited, which makes all of their products overseas and imports them, but it’s owned by these two guys who are trying to revive it or rent space or rent office space. There are a lot of start-ups in there. So, they were totally receptive to us coming in and re-tooling their manufacturing facility. It turned out that when we got there and the whole place was empty, we said, we saw this video and basically went into the factory with fork lifts and took all the pieces of machinery that we saw in the video and those are the ones that make Coffee Joulies right now, and some of them are 100 years old.
Andrew: And they’re doing it for you?
Dave P: Yeah. They’re our contract manufacturer.
Andrew: All right, so you Sherlock Holmed your manufacturing process. You said, I see what you did.
Dave P: Right.
Andrew: You also said that you made some mistakes. What are some of those mistakes you made in the eight months when you were working on creating it?
Dave P: OK. So, we, there are two different eight month periods. The one that we prototyped which we did all by hand and mostly happened in my spare bedroom and then, or in my parents’ basement, we made, we took a week and made 100 prototypes in the basement over Thanksgiving break one year.
Then there’s after Kickstarter when we got the quote from the manufacturer which said we can make these for you for this much money each, but it’s going to take a long time to get it started. Then I said, you know, OK, we’re going to go try to raise the money that we need to really move metal and make tools and do all this stuff. When it happened we went straight up to the factory thinking, let’s get these guys started for a couple weeks, make sure they know what they’re doing and then go kind of concentrate on building our business. Well, when we went up there we didn’t leave for another eight months after that which was, you know, we set up an office there. We rented a house there and we worked in the factory. I re-tooled some of the machines myself. I designed whole pieces of equipment that didn’t exist before that needed to be designed to make Coffee Joulies, and we ran the business from our office at the factory. Soâ?¦
Andrew: What does it mean to re-tool the equipment?
Dave P: Say you have a giant press that has tools in it that makes the shape of a fork, we took those parts out and put new tools in that are the shape of a Joulie, and so they make Joulies now.
Andrew: And you had to make those tools that were in the shape of a Joulie?
Dave P: Yeah. They had the facilities there to make the tools, but they were also not doing so well. This was a place that used to have 3,000 workers in it, and then maybe ten years ago it had 300 workers in it, and when we got there, it had five or ten.
Dave P: The first day that we started making Joulies, we were making them all by hand in the same method that we made them in my parents’ basement, but we were making them one at a time. We said, “We need more people. Let’s get some more people.” That day the president of the company went out and hired, I think, it was like ten new people. That was a Thursday, and Monday we walked in and there were ten new hires in his office. We were teaching them how to make Joulies the slow way. They went downstairs, and they made 500 that week, which was nothing compared to the 40,000 we needed to make, but we realized we got a lot of our process figured out and made all the mistakes really early on.
We watched every single process like a hawk and said, “Oh, it’s this machine right here that’s making all the defects. Let’s put all our effort into making a better fixture for this machine. Let’s make it work better. Let’s spend a little bit of money.” All of a sudden, next week, we made 1,000 Joulies. A month later we made 3,000 a week, and by the time we were at Christmas time, they were making 7,000-8,000 Joulies a week with fewer and fewer people and more efficiently.
Andrew: Take me to the lowest moment that you had at this stage, because right now I feel like I’m selling the audience a fairy tale. These guys had an idea, they built it in their home, they took it out to this place in New York, and suddenly they went from 100s, to 1,000s, to 10s of 1,000s and so on, and everything looks beautiful. Take me to that lower point personally where you were thinking, “What the hell am I doing?”
Dave P: I have one, do you have one?
Dave J: You start.
Dave P: There are a couple things about getting the manufacturing facility set up that we had to go through while we had this huge liability on our shoulders with Kickstarter, and 4,800 people on Kickstarter don’t know that when they gave us $40 we were driving up to New York state to an empty warehouse with nothing in it.
Dave J: We were going to start from scratch.
Dave P: To start completely from scratch. We’re up at this office working 40 to 80 hours a week some times, crashing into bed at night only to get up at 6:00 a.m. the next morning when the line starts to make sure that nothing goes wrong. I work up one day, and this happened every now and then, but I would wake up and get emails from customers, maybe 3, 4 or 5 months after we said we would deliver their product, and them writing long emails saying, “I’m so disappointed in your guys. I can’t believe how much you’re letting me down. You’re doing such a bad job that I think you should give my money back and give me the product and maybe double my order because I had to wait so long.”
Being an engineer and knowing how long it normally takes stuff to get done, I’m thinking I’m doing a great job. I’m up here working my ass off, and the only ones that contacted us were the ones that are complaining and telling us how bad we’re doing. That was kind of frustrating. As a point of comparison, we got Joulies, which is something that has never been made before, ever, from a factory that was shut down that had no employees, to shipping product in eight months. When this place was running with 3,000 union workers whose only job was to make forks, if someone wanted a new fork, they would put it on the calendar, and they would put the ship date 18 months later.
Andrew: Wow. Unbelievable. Now, you know what you’re doing, but you also know that your customers who paid you money and who had been rooting for you, are frustrated and disappointed in you. What do you feel about that? Do you feel like, “Maybe, this just isn’t worth it. Maybe, I picked the wrong direction in life. Maybe I should have stuck with my job before”?
Dave J: At that point we had no choice. We were in this.
Dave P: Exactly.
Dave J: It was just frustrating because there was nothing we could do about it. The only thing we could do was work harder, and it just sucks that when someone says, “Hey, you’re doing a terrible job” the only solution is to work harder. Well, I don’t really want to work harder when you’re telling me I’m doing a terrible job. I want to go drive down to the Jersey Shore and drink with my friends instead.
Andrew: Would you have, if you had an out, taken it at that point and said, “I’ll come up with another idea later on”?
Dave P: No way.
Dave J: I wouldn’t, no.
Andrew: Even if you had an out?
Dave P: No way.
Dave J: Well, we could always fly to Mexico with the money instead of doing these things. It was discussed briefly.
Andrew: Yeah, but if you hadn’t had people who gave you money, if it was just an idea that you were planning to launch that didn’t have any customers, but also didn’t have much traction yet, would you have left? What I’m trying to understand is, does putting yourself in a situation where you can’t back out get you, is that the only way to get the results?
Dave J: No.
Andrew: No. You would have done it no matter what?
Dave J: So, the nice thing, what I was saying earlier, the original patent ties into this, is, at first we were like, this is an idea. This is going to be our hobby for the next number of months. We’ll put $5,000 in and just try to make a $5,000 hobby. When we get to the end and no one wants to buy these, well, it was a hobby. People spend five grand on a mountain bike which can be worth nothing in two years when you break it, like falling off a cliff, so, but the whole point is that set yourself that deadline. So we said five grand is our budget and we’re going to file a provisional patent which will give us a year to decide whether this is good enough. So, a year’s time, $5,000 for a budget, and we’ll just see how it goes.
Six months later after writing the provisional patent we were on Kickstarter, and we found out that people did want to buy these and that’s where the decision was made. If we were on Kickstarter and it failed, if people didn’t want to buy it, then we might have said, you know what, this was a fun little project, but let’s try the next thing. Because we have ideas coming up every day-
Andrew: I see. So, maybe for other people, the burning your boats analogy works, where, you know, the guy, the military goes and invades, and what was it, it was Cortez, right? He lands, he decides that he’s going to burn all of his soldiers’ boats so that they can’t escape. For some people that would have worked. For you, the real motivation wasn’t that there was no way out. The motivation was, you put it out in the world and you said, hey, does anyone want this, and people raised their hands more than you expected and said, hell yeah, we want this, and gave you their credit cards.
Dave P: So the one thing I can, you’re familiar with the lean start-up idea. This doesn’t sound like a lean start-up because a lean start-up might be able to make a prototype in a week on a computer, but you can’t make a prototype in a week if it’s something that you hold in your hands, depending on what it is.
Dave J: Well, we have prototypes in a month, but they just didn’t look like this. They weren’t polished stainless steel in the exact shape of a Joulie.
Dave P: And so, what we said, which, this was over a year ago, or 18 months ago at least, was, we’re not going to stop, we’re not going to take feedback from other people who are also guessing. We made one big guess, and that’s it. People want Coffee Joulies. The only thing that we did was work as hard as we could until we could test that guess, until we could let the customers tell us that they wanted it or not. It just so happened that it took a really long time to be able to test that guess in like the most efficient and cheapest way we could possibly think of, which still costs less than $5,000.
Andrew: But the lean start-up methodology does say, hey, if you can put it up on a site like Kickstarter, if you can put it up even on your own blog and say, do you want this and will you pay for it, and if people say yes, then you go and create and if they say no then you, you don’t get yourself heavily invested. That’s the idea.
Dave P: Right, so, one of the things that the reason that we put this new method in place was because we had both started companies before and tried to do things before, not necessarily physical goods, but I get super distracted if I’m left to guess every single step of the way and say, well, I’d tell it to somebody and they’d give me a really good idea, and I go, oh s***, that’s kind of a little bit better than what I was doing yesterday. I’m going to start thinking about doing it that way tomorrow. When really, we’re all just guessing at the same time, and it serves to totally distract you, totally waste most of your time, instead of spending all your effort testing the first guess, and if the outcome is what you expect, which is it’s good, then you made a huge leap forward, whereas testing a million guesses at once, you’re not likely to get the definitive answer on any of them very quickly.
Andrew: All right, let’s see what happens next. You put it up on Kickstarter. You’re looking to see if anyone wants it. A lot of people would have left it at that and have been struggling, and wouldn’t have even cleared their minimum raise which means if you don’t hit your minimum raise, in your case about 9,000 bucks, you don’t get any of it. A lot of people would have been in that situation. You guys weren’t because you guys promoted it. One of the things that you did as Dave Jackson told me earlier, you reached out to bloggers. What did you do that got those bloggers to care about something that doesn’t get attached to an iPhone, that doesn’t get plugged into the wall, what did you do?
Dave J: Well, first of all, the fact that it doesn’t attach to an iPhone or plug into a wall, I think, helped us to some degree. It wasn’t just another me too product. This is something that people had never heard of before, and it was an idea that people could really get attached to. Everyone has burned their tongue on coffee or had coffee that was too cold. There were some funny blog posts. Recently there was a picture, a graph, where it was red up here, this thin sliver of the right temperature and then blue down here. Burning your tongue, just right and then cold forever.
Everyone can understand what that means. For me, the idea is, I was always spending time on Uncrate, Gizmag and Gizmodo. I was looking at all these different things. I knew what they wanted, and I knew what they liked. I basically gave them the blurb to work with in the same length that they would write about.
For Uncrate it was a quick, little snippet. For Gizmag they do a longer article. I gave them pictures of the exact size they would need to put them right up on their blogs and make the barrier to entry for them to put this on their site as low as possible. Then for Gizmodo that was actually, I emailed Lifehacker, their partner site, who recently did an article about the Aeropress coffeemaker, so I knew they would be interested in this space, and I said, “Hey, check this out. I saw you did an article about the Aeropress a few weeks ago. This is our new invention. We’re on Kickstarter trying to raise money for it.” The whole Kickstarter component of the story was really compelling, too. We were saying, “We have this idea. We just need you to help us get started, and then we can share this idea with the world.”
Andrew: Yes. I’m taking notes on this. I want to come back and make sure that my understanding is . . .
Dave J: Yeah.
Andrew: I’m a big obsessive note taker. Is that something you guys do, or is this like a dorky habit that I just can’t let go of?
Dave P: It’s just you
Andrew: It’s just me, right?
Dave P: I’ve never taken a note in my whole life.
Dave J: No. We’re not allowed to take notes.
Andrew: See this whole time you guys are looking at this funny stick in my hand, and you’re going, “How does that attach to his iPhone?”
Andrew: I take notes, and I take them with pen or pencil because it’s quieter.
Dave P: I have a little book where I write my ideas down and stuff, but I don’t usually take notes.
Dave J: It’s one of those things I always feel like I should do more of, but I never end up doing for whatever reason.
Dave P: Every time I try to do it, I go back and I’m like, “Where is that notebook?” I’ve never used it once, so . . .
Andrew: That’s where Evernote comes in for me. I just shove it into my scanner over here, and then it’s there. If you and I have a conversation a year from now or a month from now I’m trying to think, “What was it that they did about PR because I need to get PR, too” I never wrote it up on the site. Well, I can go in, look at my notes, and here’s what I got from you. First of all, Dave Jackson you said, “You wrote the articles for them.”
Dave J: Yes.
Andrew: I’ve actually seen that guests who pitch themselves for Mixergy interviews who, at least, will write the headline for me are so much more compelling than others who say, “You should have me on”, or “I’m doing this”. If you write the headline, I can imagine the way it will fit in with my audience so much better.
Dave J: Right.
Dave P: Yeah. You get two seconds to get their attention so you want to do everything you can to make it look like, instead of asking someone to do homework for you, say, “Here, I did all this for you. Can you help me out?”
Andrew: Yeah. Almost like plagiarizing the way that they would write.
Dave P: Exactly.
Andrew: Right? You want to mimic it so that they can see themselves, see you, on their site. The other thing you said you did was . . .
Dave P: There were other blog posts that we looked at that that explained the process to us. One of the things we do, if we’re setting up to do something that we don’t know what we’re doing, the first thing you do is go find out all the information you can on how to do that the best way possible. I remember having conversations with Dave about when we were going to send to the blog, what the email should look like and having this same conversation beforehand and saying, “Well, somebody else has done this. Someone else has figured this out. Let’s look at all the opinions of everyone else on how to do it.” Those little tidbits were pieces that we pulled out from all over the place and recommendations that we saw.
Andrew: That’s great advice, by the way. I was writing a note about that, too, but this time on the computer because I wanted to come back at the end of the interview and talk about that. Actually, what I wanted to say was that we did a course here with Stella of Feefighters whose company was recently sold, and who I pushed to do an interview, but she and the company’s founders said, “Hey, now is not the right time. Groupon just bought us, Andrew. Give us a moment, and then we’ll do an interview in the future.”
Stella of Feefighters came on here to do a course on how they got PR, and she’s got this system. If you just look at it, you think, “Boy, this is really logical.” Anyway, if you guys who are watching us are Mixergy Premium members, go to Mixergypremium.com and take that course if you’re at all interested in getting PR.
The other thing I noticed that you did is you related it to what they did. You looked for a writer who wrote about something similar to you. You didn’t think, “Well, he already moved on because he wrote about a coffee, or he wrote about a topic that was similar to us.” You said, “No. He’s a good fit for us.” Then the final note that I wrote was you sent them a picture.
Dave J: Multiple pictures.
Andrew: Multiple pictures. Your products are beautiful.
Dave J: All in the exact size they needed to put it right onto their blog.
Andrew: How did you know what the exact sizes were?
Dave J: I could go onto the home page and download it and just see how big the normal picture was.
Andrew: I see.
Dave J: Length and width, and then send them three of our best pictures that we had that would be in two different sizes for Uncrate, for example, to have the one when it’s at the top which is a certain width, and then they have another one that’s slightly narrower.
Dave P: They used both of them.
Dave J: They use both of them because it ended up being at the top and then further down, and then when you click on it and it goes to the single page it’s at that same width again.
Chris P: One thing I wanted to say about getting PR is we could have done all of the same exact steps to get PR but if it linked back to a crappy Kickstarter page. Or even if one thing was broken about our Kickstarter page, we could have gotten all the press in the world but not made the same amount of money, not raised the same amount of money that we raised on Kickstarter. We fine tuned Kickstarter to an unbelievable degree before we launched based on the other information on Kickstarter that you’re able to go and research.
Andrew: ike what?
Dave P: Well, there are only a few things that you can have in a Kickstarter project. There’s your goal. There’s the amount of time that your project is up for. There’s your video and there’s your tiers, what your rewards are. You can go and see what other successful projects did for every single one of those things. We actually even went to the extent of pulling data off the website and putting it into an Excel spreadsheet and looking at just the trends in the data. You know, one thing that we realized kind of late in the game before we were almost ready to launch, was no project in the top, as far as we could see that has been successful that made a product had met their goal if their goal was higher than $15,000.
It’s different now. It’s different now. Other projects have raised a lot of money, but Kickstarter is changing and growing. But at the time projects over and over and over again were asking for $20,000, $40,000, $100,000, $200,000 and every single one failed. Meanwhile there are projects on the top of the list that raised $900,000, $300,000, $150,000 and we were like oh, $40,000. We should be able to do that. That should be a good goal.
Then we were like whoa, no one has asked for $40,000 and raised it. That might be a red flag and I think that we’ve kind of stumbled upon something which helped us greatly which was the faster you get over your goal, the better. We set the absolute minimum that we could, and once we were over it people are buying a product, they’re not gambling on your product any more. They’re just getting on a bandwagon that’s already totally taking off. I think that helped.
Andrew: That’s a great point. I love the way you guys think, too. To sit down and say what’s worked for people in the past is a step that some people would have never thought of.
Dave J: Well, this is the engineering mindset. This is a problem that we knew we had to solve in advance. It’s like when you build a bridge you’re not just going to, you can’t have an MVP of a bridge, right? That just doesn’t work. We knew that we had this chance to go on Kickstarter, they accepted us. How are we going to make this successful? We were accepted, I think, in maybe late January or early February. It took us a long time to finally launch towards the end of March. But that’s just because we wanted to make sure that everything was perfect. We did our homework and we looked at every project we could that had been successful. And every one that we could that had failed. We saw what their tiers looked like, what sort of discount they gave off their suggested retail price.
Dave P: How much money they made at each tier.
Andrew: So that you know what tiers to put it in? You know what, I noticed that this is something about my audience. The Mixergy audience loves doing stuff like this, but I’m looking for a name for it to make it more interesting and make it something worth fighting for and worth talking to your friends about. Because if you say I’m into research, you’re a dork. People don’t talk about it.
Dave J: Well, dorks rule the world so it’s not a bad thing.
Dave P: It’s data driven decision making.
Dave J: Which isn’t any better, is it?
Andrew: That’s not any better. Is there something, is there like life hacking” You know, once you came up with the term life hacking, what was it? I read about it, I heard about it on the media I think it was, the guy who came up with the term life hacking got an idea that then started to spread. So far, actually, that hackers started hating him for it. But the term helped get the idea out there. Lean start ups, the term helped get the idea out.
If we come up with a term for this kind of hacking the system, it’s an idea that could spread. Until then, the audience is still going to keep doing it because that’s just who they are. They’re people sitting there thinking I’m going to be interviewed by Mixergy one day. Let me think about what questions really get him excited. Or I’m going to do an interview and steal Andrew’s audience one day, let’s see which questions he asks that really get people hopped up.
Dave P: Engineered success.
Andrew: It’s what?
Dave P: Engineered success.
Andrew: Engineered success. All right, I like that. I’ve got to go back to my pen and paper. Geeks do rule the world.
Dave J: But there’s just so much data available on Kickstarter and on the Internet that if you really, really want to set yourself up for success and you don’t take the time to understand as much as you can what’s basically just sitting right in front of you, you don’t really want it that bad.
Andrew: But you know what? Most of the world doesn’t think that way. Most of the world knows that this stuff’s out there, but when they think about success they think, I’ve got to figure out whether I want an Android or an iPhone. And then, I’ve got to tell everyone who has the other phone that they’re idiots and jerks for picking the wrong phone. That’s like where their heads go, to that kind of analysis and that kind of stand that they’re going to take.
Dave J: Well, that’s evolution. Everyone wants to be on the winning team, you know. You don’t want to buy an iPhone and have Android win. So if you’re on the iPhone team, even if apps crash every now and then, you’ve got to tell everyone else that they’re idiots for wanting the Android. It’s the whole evolutionary mindset. But that’s what we need to overcome. This is not evolution, right? This is about using what we’ve evolved into to grow above. You know, that’s the whole point of society.
Andrew: Well, now we’re on the engineered success team.
Dave J: Yeah, exactly.
Andrew: There you go.
Dave J: The do your homework team. The do you want to make a lot of money very quickly team. And do good stuff.
Andrew: That only gets people like me excited with pens and papers. All right, so you get on Kickstarter, you talked about how you made that work. I love the way you talked about that. Now, it’s time for you to be a business that’s already out there and growing customers, not just investors who eventually get the product. What did you do? You launched on Shopify right away?
Dave J: Well, we opened an online store on Shopify. But we didn’t build it or do anything with it because we had these 4,800 customers that we needed to fulfill first.
Andrew: Because you already got them through Kickstarter.
Dave J: Yeah. And actually the reason we chose Shopify, my friend Zach told me about this. They had this build a business competition that basically started like three days before we launched on Kickstarter. So, we’re just over the qualification guidelines, which was completely by accident. I had no idea it was in there. But some may call it fate at this point. So, we knew they had this build a business competition. The rules this year were whichever company had the highest two months of sales combined wins $100,000, lunch with Gary Vaynerchuk, dinner with Tim Ferriss and a meeting with Seth Godin.
And so we said, well we just did Kickstarter, this is the next goal for us is to win the Shopify competition. Which seemed outlandish at the time. Because the previous winner was dodocase, and they had done so extraordinarily well. They’re this huge icon to look up to. Because they were also doing Made in America traditional manufacturing technique product. You know, a physical product for your electronics, good. Which, I mean it attached to an Apple product so maybe it’s a little different, but.
Dave P: Can’t get away from those Apple products.
Dave J: Yeah, we’re like what can we use to fight Apple? Coffee. It’s the only thing we used to fight Apple.
Andrew: The iCoffee. yeah, the dodcase, of course, is the iPad case that did, I think it was over a million dollars worth of sales. I had the founder on here to talk about how he built it up. He’s a guy who used to be in software, didn’t work out so well for him in software, and he decided he was going to get into the physical, tangible product world.
Dave J: Surprising how fun it is to hold real things in your hand and to see real things being made.
Andrew: All right, so you saw that Shopify had this contest. You said, we’re getting in on that. That means we need to open up our own store already. We’ll build it on the Shopify platform. But what else? What else did it mean? And then, I want to know how you got customers into that store.
Dave J: So, because we had to stop accepting pledges on Kickstarter on May 2â?¦.
Dave P: Is that tea?
Andrew: I am a tea drinker, andâ?¦ You don’t like tea?
Dave J: No, we like tea.
Dave P: We just like coffee better.
Dave J: oJulies actually work very well with tea, too.
Andrew: I was going to ask you because here’s the thing. I’m now getting distracted. Here’s the thing. I got this to keep my hot water hot throughout the day, because I’ve got the same issue you do. It has this little button right here on top that’s supposed to keep the tea warm, the hot water warm, excuse me. The problem with it is that it makes this little sound. I don’t know what it is, maybe steam coming out of something all day. So, I have to turn that off while we do these interviews. If I get a Coffee Joulie or Coffee Joulies and put them in my teacup, it will keep the tea warm. Will it start absorbing the flavor of the tea? So, if I put a different tea bag in, it will start combining the tea flavors?
Dave J: No, it’s made of the same stainless steel as silverware. So you’re still not going to absorb the taste of spaghetti sauce one night and whatever the next. Unless you don’t wash it right, you know. But no, they’re completely inert.
Andrew: All right, so sorry. You were telling me about how you sell this.
Dave J: Shopify. So we were collecting e-mail addresses next.
Andrew: How did you collect email addresses?
Dave J: So, we were using WordPress for our site at first. And well towards the end of Kickstarter I realized, like in the last day, that holy crap we need to find some way to collect all the traffic that’s going to this page. And so I used Madmimi [SP] who has a widget that goes right into WordPress. And so, within one minute of our page turning off, I had this up and we were collecting email addresses from then on.
Dave P: What did we get, like a few hundred in a day or two?
Dave J: A few hundred in the next like few hours.
Dave J: Everyone of those was just people who heard about this. I mean, it was viral. It was traveling around the interwebs which is a series of tubes, I don’t know if you’re familiar.
Andrew: I see, I’ve heard of that. I see, so this whole interwebs thing. People were reading your story and getting clicked over, or getting linked over to Kickstarter but they were also Googling or talking about it and ending up on your site in other ways. And when they were, you got their email address.
Dave P: We got to put a link right at the top of our Kickstarter page that says if you missed it, go here. The only thing on that page, well, the most important thing on that page was the email sign up form.
Andrew: This is after Kickstarter that you did this.
Dave P: Yeah, this is after Kickstarter ended.
Andrew: Oh, so Shopify didn’t get started and your own sales didn’t get started until after the Kickstarter campaign was over?
Dave J: Until months later.
Dave P: Right.
Dave J: This was May 2nd. I turned on the Shopify store on, I think it was November 15th or something.
Dave P: Right.
Dave J: That entire period of time we were collecting email addresses from potential customers while we were going through the process of manufacturing and then fulfilling all our Kickstarter orders.
Dave P: The press wasn’t slowing down either. We had some of our best press exposure after we were off Kickstarter because it takes a while for the story to get out there, for the right people to hear it. I think we did our morning edition on NPR’s piece after Kickstarter ended. We had Yahoo.com home page for a day after Kickstarter ended.
Dave J: Which crashed our website.
Dave P: Completely crashed our website.
Dave J: Which is one of the things that I would have done differently now is Shopify we thought was just this e-commerce platform where you put your store on there and sell stuff. But really, it’s a hosted web page with unlimited hosting but truly unlimited hosting. None of this bullshit $14 a month unlimited hosting that crashes as soon as you get one good piece of PR. If we would have had it on, if we had a Shopify page not selling anything but still collecting email addresses when Yahoo hit we would probably have twice as many email addresses as we ended up getting because of the amount of hits we got just in that one day alone.
Dave P: Yeah, and that could have been worth a lot of money.
Andrew: You know what, that’s such a good point. I had this unlimited hosting and I got really excited about it, this was on Mixergy’s early days. One day my site just went under, and I called to complain. I said look, I’m not getting excess traffic today, what’s going on? They said oh, you’re sharing a server with someone else and that guy’s a dick. I shouldn’t, excuse that. But I go wait a minute, first of all no one told me that. Second, if he’s a jerk, I have to suffer for it? There’s not way to keep him from, you know, from ruining my experience? They said oh yeah, we’ll move him to another, we’ll move you away from his server.
Dave J: Which takes 24 hours and by that time…
Dave J: …it’s all gone.
Dave P: Yeah, we had two million page views on our story on Yahoo.com and it took 16 hours to get our site back online. Which by that point it was all gone.
Dave J: It was gone.
Andrew: The anger that you feel at the moment.
Dave P: You can’t do anything at that point. Just be like well, whatever.
Andrew: That’s the worst time for Olivia to have been married to me. Any time I go through that I’m helpless and I’m frustrated. OK, so you would have put it up on Shopify because they have unlimitedâ?¦
Dave J: Truly unlimited. And also, we would have had time to hone the site while we’re not selling anything except an opt-in for an email address which is a much lower barrier to entry, so there would be time to perfect it. What we ended up doing instead, we had the website I built in, I don’t know, January on WordPress running until mid-November. By that time, we finally finished filling orders for Kickstarter and in ten hours one night, we were working with some coders and designers who we were going to have them build this site for us. For whatever reason, it just ended up not working out at the very end.
I was like well, we need to start selling tomorrow online because we have this two month window and we’re already into November. We have November and December to sell. I think this is one of the reasons why Harley was so amazed by us because we came from nothing, just some store that hadn’t done anything for six months of still paying for their hosting plan or whatever. And then turning it on on November 15th. I spent ten hours at night building this site that we would use and then emailed 17,000 people over the next month and went from nothing to $275,000 in sales in a month and a half. They probably just lost their minds. They were like what the hell, who are these people, how did they do this?
Andrew: Let’s pause there and really dig into what happened over this period. First of all, what happened over that period was influenced by what you did before which was you had a successful Kickstarter campaign. You had press that was at first blogs and then, as you told me, NPR. You were getting some press. But you were also smart enough to collect email addresses of people who were coming to your site so that you could market to them over time. What else did you do that I’m missing that allowed you to have those killer, it’s not just a month and a half, those killer two months that helped you become the winners of that contest? $100,000 in cold hard cash.
Dave J: We had these email addresses, sending out the emails. But once people started seeing us again, right, it sort of, it became dormant. It was relevant during Kickstarter because you have this window of time when you can get in on the opportunity. And then the window closes and it’s like, crap, I missed it. And you give us your email address. But now it’s the holidays. And everybody knows someone who likes coffee or who likes coffee themselves. You want to find a gift. This was $50 for a set of five which is the perfect price for a gift for people during the holidays. And so we’ll email them and they’ll say, oh that’s great. Or maybe, they didn’t want it but they’ll show their friend or they’ll get it for their friend. The timing was perfect.
Dave P: Christmastime was just bananas.
Dave J: And almost, the whole thing was almost unfair. Kickstarter was so good. And then, we had this time to collect all these email addresses and concentrate what would effectively been eight months of sales into just two months to really gain the whole Shopify contest system. And also during the holidays that’s when everyone does the most sales, as we’re learning now. And so, it just all worked out perfectly. And there really wasn’t anything else to it besides the right timing and having a good email message.
Dave P: But it was just the e-mails. Collecting that e-mail list is how we made most of our sales in Christmastime or in November or December. And also our product still was spreading virally in December because it was a great gift product. A lot of the people that wound up coming to our site either bought or came back and bought later. Because it was just like, well this is a cool gift. I heard about it from a friend. It wasn’t which iPad product do I buy? It was, this is something cool and new and it’s the perfect timing for it. So we hit the email lists hard and the rest of it was organic.
Andrew: How much of the story do you think was Kickstarter and how much of the story do you think was your product?
Dave J: So, Kickstarter was the story during Kickstarter. And it was a big component of that. And that’s why we willingly gave them, gladly gave them the 5% share that they asked for for every successful project. You know, that was a bargain. But during the holidays, it wasn’t Kickstarter at all anymore. This was entirely the product.
Andrew: You just had the momentum.
Dave J: People just wanted this thing that they could give to their friend who likes coffee and hopefully have them enjoy their unique gift that they’d never heard of and would get to enjoy forever.
Andrew: Here’s why I was thinking that. Here’s why I asked that question. It seems to me having done these interviews that the media and the world in general gets this fascination with certain things. And if you could hook yourself into that fascination, you get to ride the wave. So, if the media is fascinated by Instagram, for example, and you can say, I’m going to sell on Instagram. Even if I get 20 sales off of Instagram, even if I get five sales of it, I have enough of a story now for people in the media to say, Instagram is great for photos, and this guy is also selling something on Instagram by just holding up pictures and taking clever photos of whatever it is.
Dave P: Can we use that idea?
Andrew: Right. Like we’re now going to open up an Instagram store and really blow things away. Any validity to this thought process or am I just riffing here and I’m off base completely. What do you think?
Dave J: So you’re saying our attachment to Kickstarter, because that was a clever platform?
Andrew: Yeah, I mean there are a lot of reasons to use it. Even if the world didn’t care about Kickstarter, it would have been a good tool for you guys to use. But I’m saying that the press also got in on it because of Kickstarter, that people have been looking for Kickstarter stories.
Dave J: I think it was a combination of being on Kickstarter as a starting point, but also the validation for this is why Kickstarter exists. This idea that never would have been made before. They needed this much money to go to this factory and create all this specialized tooling and all this other stuff. There was no other way it was going to happen besides Kickstarter. So, this is why we like Kickstarter. It’s for projects like this. And we were like the showcased product that you can discuss that shows this is what Kickstarter is about. Taking some unique thing that’s never existed before, and the only way you can actually get it out there is by having it go viral on Kickstarter and getting it all around the world.
Dave P: And, making stuff go viral is something that totally fascinates us. I personally spend a lot of my time trying to figure out what it was about something that made it spread on the Internet. And so he said, yeah there’s a lot to it about Kickstarter. We were a great poster child for Kickstarter success and how we leveraged Kickstarter. But our idea also had to spread on the Internet. I think part of it was because of the idea and, you know, coffee…
Andrew: What was it about the idea that made it spread?
Dave P: So coffee is universal, everybody knows, a lot of people drink coffee. A hundred million people in the United States drink it every day. Everybody knows you drink it too soon you burn your tongue. Everybody can relate to that. But then, everybody buys travel mugs and they’re all over the place. And so, we still answer the question, get the question every day, can you build this into a mug? I just want a mug. I don’t want to buy Joulies. You know, in use it would probably get a lot more convenient to have it all built into one product. However, there are mugs out there you can plug into your cigarette lighter. There’s mugs that cool your coffee down or regulate temperature some other way, but they’re not viral. They didn’t explode on the Internet.
Coffee Joulies are something that no one’s ever seen before, ever. When you see a picture of them, specifically the ones that we shared with all the blogs, you have to stop and you have to say, “What is that? What the heck is that silver shiny coffee bean?” It’s really eye-catching. Then, when you hear what it does, it’s something that you’ve never heard before. Both of those things are completely new and completely unique. I think that’s what helped people go, “This is so interesting, you’ve got to see it,” and share it with their friends.
Andrew: I see. You know, you told me that you each, I think, had a business before that failed. I’m looking at this success story and I’m wondering, now that you guys have had this big hit, can you look back on your two businesses and see what you did wrong, what now you know that you didn’t back then? You’re nodding.
Dave P: Yes.
Andrew: So, what are some of the things? What was the business, and then what did you see that you did wrong? I want to learn from those setbacks, too.
Dave P: I spread myself too thin. I didn’t have a thing that I was trying to test, a guess that I was trying to test with customers. I wanted to make beer brewing equipment. So, I registered in Maine and I had a really great idea for a kit for beer brewing equipment. I knew exactly what it was going to be. I knew exactly what the components were. I knew where I had to go in order to get them and put them together, but before I got started, I said, “Well, maybe I should learn more about beer. Maybe, I should carry some other products to get my store started first.”
Then, a few months later, I was reselling beer products from other peoples’ sites for no margin whatsoever and tearing my hair out over how to get people to my site and all this stuff. It was totally not what I set out to do. It was just what I had decided through some random path that I was supposed to do in order to get there. It didn’t work. I got totally sidetracked. Then it wasn’t interesting anymore, and I stopped.
Andrew: So, instead of spreading yourself too thin and doing too much, you would have, obviously, focused, and you would have focused on something that would have been a test to see if customers were interested in it as much as you were. What would a good test have been back then?
Dave P: The idea was I wanted to make this one kit and sell it for one thing to do something that you don’t normally do with beer brewing. I didn’t do that. I didn’t focus all of my effort. I only have so many hours in the day to focus on. I didn’t focus all my effort to get that put together and give it to someone and see if they liked it.
So, no matter what you have to do, if you were going to do a lean thing, I didn’t have to make all the parts myself, but it had to represent my first thing, the thing that I was excited about, had to do it as fast as humanly possible, because it’s the only thing that really matters.
Andrew: The Ziploc bags that were full of your secret recipe, did you give them to anyone else, or was it just the two of you that used them, the early prototype of Coffee Joulies?
Dave P: A handful of people did have them, but we used them exclusively to test performance and make sure that the idea was solid and that they worked exactly how we thought they were going to work. If we thought that shiny metal coffee beans in your coffee cup was the idea that someone’s going to pay for, and someone says, “I don’t want to pay for baggies of stuff,” then you didn’t really learn anything yet.
Andrew: I see. This wasn’t a market test, it was a product test.
Dave P: Yeah.
Andrew: Dave Jackson, what about you? What do you now know about your past business that you didn’t know?
Dave J: So, I had two different projects I worked on with one of my friends in California. One was an energy drink company, and the other was an electric solar-powered car company.
I think, as Dave was saying, the biggest issue is getting distracted, and also listening to people who have feedback because they don’t know what the hell they’re talking about. Why are you listening to them?
Ideas are the most vulnerable right when you think of them. When you think of a good idea, your instinct is, “Let me go see what someone else thinks.” So, you run to the nearest person. You say, “Hey, blah,” and then they say, “That’s stupid. Why are you thinking about that?” Then you’re like, “Ah,” and then you walk away with your tail between your legs and the idea dies right then.
What you should have done, instead of running to a person, run to your little shop in your house and make the thing and get to the MVP status. Then try to get someone who actually would appreciate to get it, a customer, and see what that customer thinks. So, for us, this is hard, telling the idea of Coffee Joulies to my parents, for example, who thought it was really stupid.
Dave J: So, they had plenty of crow to eat on day five of Kickstarter or whatever it was. We all want validation. We all need to know we’re doing the right thing, but you just don’t get that. That’s not what you have when you’re an entrepreneur. You don’t get any validation. What you need to do is thrive off of people telling you you’re an idiot and then prove them wrong, as we did. I think that’s what I learned. You know, believe in yourself. Don’t give up on these things. If you think it’s a good idea, well then just make it. See what happens.
But also think about it in the correct way. Don’t think this is a billion dollar idea, whatever, and quit your job immediately. Think this is a neat hobby. I’m going to dedicate some amount of money, some amount of time, try to make it. See if someone wants to buy it and if they want to buy it, then that changes things and now we look at this as a business.
Andrew: Let me ask you this. You guys were also each in tough situations that made you dream of having that million dollar sale, for example. Was it a million dollars in sales, a million dollars in profits, a million dollars in…
Dave J: Whatever. It was for a million dollars, that was just the quick little blurb of an idea back in the day.
Andrew: I was there, too. I mean, my PIN for my bank account at the time was a million. I just wanted to get to a million, and every time I called a bank I said I’ve got to remind myself that this is what I want to hear from them at some point in the future. That helps you get going.
I know, too, I’m watching Downton Abby with my wife, those guys are so freaking rich and not one of them is thinking I want to have $1 million. Not one of them is thinking anything except I need to marry the perfect husband or the perfect wife, whatever. There’s something about where you were that made you dream that big, right? Where were you guys that made you say I’ve got to reach for something bigger? What was the before story now that we heard the after story?
Dave J: For both of us it was basically working a day job. Working for somebody else and seeing it, seeing the people around us ending up getting married and doing the same stuff and just having this life that didn’t seem to be, like, what the American dream is supposed to be.
Dave P: We were both pretty big believers in Tim Ferriss’s book, “The Four Hour Work Week”. We could probably make something work outside of it and not have the deferred life plan. Not to save up all your money and work really hard when you’re 25 so you can have a few extra bucks when you’re 55 when really you want to enjoy yourself when you’re 25, you know?
Dave J: It was about how we could escape that, and it’s not like it was a bad life. I had a lot of fun. But it was nice to have the idea of being in control. Having the freedom to not have to be in Fremont, California, for example, which is the exact worst place in the entire world. We’re caught across the bay from San Francisco but you just can’t be there because it’s just, there’s not way to get to work. I was like, why am I doing this? Why do I work for this other person? There’s got to be some way I can work for myself. That was the whole point.
Dave P: There’s more to it than just watching other people around you sit in a cubicle and play the rat race. I really enjoyed my first two years at work, and I learned a whole lot about what it takes to make something a reality. I go back and now I talk, do interviews and stuff like this for other students and they say, how can I do this right out of school? I wouldn’t have had any idea what to do straight out of school. I worked in a cubicle. I was an engineer, I did stuff.
One of the other things that made me want to get out and do my own thing was watching a big company waste ungodly amounts of people’s time. And just sit there and have somebody guess about a schedule or a deadline or a project, and you could all sit across the table from each other and look at each other and say what is the likelihood that this guess is going to be right. And everybody at the table would agree that it was zero. And then, everybody sits and works for months at a time just so we can, you know, based on…
Andrew: This zero likelihood to succeed idea they’re still all working around it?
Dave P: Yeah.
Andrew: Let me suggest a couple of follow-ups for the audience, and then I’ve got one last question for both of you. The follow-ups are this. Guys, if you’ve seen, these guys obviously engineer success. They do their research and then they go and apply it and you’ve seen the results. If you’re that kind of person, if you’re not that kind of person, congratulations on sitting through this whole interview instead of watching another episode of The Simpson’s, but the rest of what I’m about to say isn’t for you.
If you are that person, I’m going to recommend a few courses to take at MixergyPremium.com. The first is Clay Collins did a monster course on how to create your product with your audience, how to sell it to them before you launch it, and then how to make sure that you have monster sales. Clay Collins’s course is available at MixergyPremium.com. If you’re a Mixergy member, go and watch that course and you’ll see how he does it step by step. If you’re not a Mixergy member, I hope you join.
There’s another one that I want to recommend to you guys which is, we talked a little bit about email, one of the courses that has stuck with me is the Justin Premick course. He’s the guy from A Weber. He came on to do a course on how to use email. I’ve been using one specific tactic at Mixergy every single week. I’ll tell you what it is, and I recommend you take the course because there’s way more in it.
He said, “Andrew, people should not email their whole list at once.” They shouldn’t even do what they think is A/B testing, which is take 50% and send them one message, 50% and send them another message, because then you’ve killed 50% of your audience with a bad message. He did this, and this is what works for me. He says, “Take three small pieces of your mailing list,” In my case, I do 10%, 10%, 10%, and run three different messages to them. See which one really works and run that to the other 70%. In my case, it’s 70%, but that’s the way to do these tests.
I’ve had emails that I thought were going to do really well. There was one that I sent out last week with a personal story that I spent time crafting. It actually got a lot of opens and a lot of clicks, and nothing after that. It just bombed in the worst way, and I had to be vulnerable. I got to be vulnerable and it bombed, and what the hell is the point of that? This other one that was more my ordinary style suddenly killed. Guess which one I sent to the 70%? If you’re into email, take that course with Justin Premick. It’s at mixergypremium.com. There it is, take that course, mixergypremium.com. If you’re not, I hope you join us and become a member.
Guys, Dave and Dave, here’s the thing that I’ve been wanting to ask you. We talk so much about highs and lows in these interviews, and what I realize is, I don’t spend enough time on the high. I actually spend so much time on the low because I want to know about how you suffered when things were bad. I identify with that. I want to know how to get out of it. I want to know about what you did to get first customers, which is a struggle. I’m not spending enough time on what is the best part of having made it. Now that we’re at the end of the interview, we’ve gotten to the place where you guys have told us that you’ve made it. What’s the best part? How is life better, or is it still the same old crap? It can’t be. You left the same old crap, that’s why you didn’t want to get a job, because of the same old thing. How is life better now than it was before? What’s one thing that’s better?
Dave J: For me, for example, I’m in New York. I live in San Francisco, and I got a one-way ticket over here with no idea when I’d fly back. I’m not even flying back to San Francisco. I’m going to Portland next for the SCAA, Specialty Coffee Association of America’s trade show. We have a table there where we will be talking about Joulies. After that, I’ll go back to San Francisco, and then I’ll probably come back to the East Coast later on. I can be wherever I want to be to do this. I don’t need to be in an office somewhere. To me, that’s what freedom is about not having to be in one place at any given time. That has changed the most for myself, about my life.
Dave P: I’d say that any time I get to all of a sudden re-evaluate the perspective I have and see what kind of choices I have in front of me, options in front of me that I didn’t even ever think I would have. Before, when I was working at work, the best case scenario if I was still at work a year from now is my bank account would probably look a little better and my job security would be great.
Andrew: Your bank account would have been better at the job than it would be here?
Dave P: Yeah, probably.
Andrew: Jackson is smiling. It seems like he’s saying, “Yeah, it would have been.”
Dave J: When you own a business, there’s a lot of value on paper. You don’t always have that much value in your account just yet.
Dave P: It’s not in my personal account.
Andrew: You didn’t even take the $100,000 that you won from the Shopify contest and put that in . . .
Dave P: Into the business.
Andrew: That’s back in the business. Buying more secret ingredients, buying more stainless steel, that is what it is.
Dave P: Precisely.
Dave J: Inventory, yeah.
Andrew: At this point, it’s not about flying around. It’s not like you’re flying around from island to island and really getting to enjoy your early retirement. It’s not that. Dave Petrillo, it’s clearly not about having extra cash in the bank and calling up the Citibank automated system to hear it say, “You’ve got $10 million.” It’s not that yet.
Dave J: It’s all about the life story that we have now. This is just that big component . . .
Andrew: That’s hit, but what about this? The way you carry yourself now. I’ve noticed that when Mixergy Premium started doing better, my voice changed. My attitude towards things changed. I felt freer to do things like order lunch from the nice place. What’s the big difference, right? I could have done that before, but I felt different towards that. I felt different when people asked me for advice, I felt different when I was listening to people’s problems or when I was sharing. .There was a sense of, “I got it. I’m in control with this,” and that’s a way different feeling than I had before. Do you guys experience any of that?
Dave J: Absolutely. I think the funny thing is that you don’t know any more now than you did before Mixergy Premium was good, but now you believe in what you know that much more.
Andrew: Because it’s been validated by the world.
Dave J: That’s why successful people end up being more successful, because we’re just proven right over and over and over again. Every time we’re proven right, it’s not because you learn some new thing, it’s the stuff that you already probably knew inside, that you thought it would be good. When you get validation that what you actually already know innately is right, that helps you to use that.
Andrew: What’s your equivalent of either buying lunch from the nice place and having them deliver it, or having a conversation with someone where you could have been insecure but suddenly you’re feeling like you know what you’re saying and you can speak it with that kind of authority. What’s your equivalent of that? Tell us a personal one, if you don’t mind.
Dave P: I think about what it would be like to go back to my old job and, like, that’s always my last ditch strategy. If everything doesn’t work out and I’ve got no money left, I could always go back and work there for a little bit longer, but thinking about it is really gratifying for some reason because you think about what kind of different opinion you’re going to have and how you’re going to carry yourself differently and what I would do the first day I walk in there. You wouldn’t go sit behind a desk and take orders from somebody. You could basically call it like you see it and stand up for yourself and say “Hey, we’re wasting a shitload of time right now.”
Andrew: I see. So, if you were back there, you could speak your mind.
Dave P: Yeah.
Andrew: And even that’s liberating. The thought that you don’t have to sit down there and know that the ideas are stupid and everyone knows they’re stupid but you can’t call it out because you don’t have the authority or the confidence or the standing in the world. Now, you do have the standing in the world.
You’re a proven businessman with a proven successful business, with the Shopify contest won behind you, with conversations with Gary Vaynerchuk as a result of that and all of that. More than all of that frankly, if you don’t mind me revealing to the world. This Mixergy program, I know, it’s made you guys the proudest of all these accomplishments and so, you can never go back to being just another pitcher in a room.
Dave P: Right.
Andrew: Let me say this to the audience. Guys, I’ve been talking about this, and I’ve really been doing a, what is it, misjustice, disjustice…
Dave P: Injustice.
Andrew: Injustice, thank you. An injustice to the product. It is freaking beautiful. Apart from what it does, and apart from the chemicals inside and how they sold it. If you never buy it again, if you just go, he’s going to show it to you, it’s not going to look the same but do show it.
It looked good. Go to Joulies.com and just take a look at the product and the presentation. And even if you never buy it, sometimes just looking at the presentation just is inspiring and, in your case it is, and I really appreciate you doing this interview. I’m not a design person, God knows. Look at my hair, look at this room, look at the backdrop.
You told me you did an interview with someone else who sent you a camera and a mike. I’ve sent you nothing to you. I said, I’d take you any way you have as long as we go through all my research and we give the audience actionable stuff. But I still could appreciate beautiful design, and, man, you guys have beautiful design.
And I hope the audience goes in and checks it out at Joulies.com and one more thing if I could suggest it you guys in the audience. You see how vulnerable entrepreneurs are sometimes? They get an email, even though they’re doing well and they’re getting all these sales from Kickstarter. They get an email from one [inaudible 01:17:28], one jerk who decides to complain and we take it personally.
If you sent entrepreneurs the opposite email and say, “Hey you know what? I saw it. I bought it. I love it” or “I saw you guys. I was inspired. I’m using it”, you have the same kind of impact in the reverse, in the same kind of memory stuck with them.
The guy, Mike from FreshBooks told me when he had no sales, those kind of emails got him going, and you know he can remember the people who specially got him going.
So, I’m going to suggest to the audience, if you got anything out of this interview, send a thank you note to them. Not to me, I don’t need your emails. Send a note to the two Daves, and if you didn’t get anything out of this interview and you got something from someone else, and I’m a big jerk who talks about his hair and his backdrop too much and you didn’t like any of this, if you read a blog post somewhere else where someone gave you something useful, send a note. I guarantee you’re going to have the kind of impact that you want to have, and hopefully a relationship will come out of that.
All right. Dave and Dave, thank you for doing this interview. Everyone in the audience, thank you for watching.
Go check out Joulies.com.
Dave J and Dave P: Thank you, Andrew.