How Diego Saez Gil built a smart luggage company into a multi-million dollar company

Imagine you’re a venture capitalist looking at investments all day long and this guy from Argentina walks into your office and says, “I’ve got this great idea. It’s luggage.”

Luggage? Really? Well, if you continued that conversation–and didn’t run away–you’d end up with a big hit on your hands because that’s what today’s guest actually built.

Diego Saez Gil is the founder of Bluesmart, smart luggage that tracks itself, auto-locks and charges your devices. Find out how he did it in this interview.

Diego Saez Gil

Diego Saez Gil

Bluesmart

Diego Saez Gil is the founder of Bluesmart, smart luggage that tracks itself, auto-locks and charges your devices.

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Full Interview Transcript

Andrew: Hey, everyone. My name is Andrew Warner. I’m the founder of Mixergy, where I interview entrepreneurs about how they built their businesses.

I say that I do this for an audience of real entrepreneurs. That’s why I’m so proud whenever I interview an entrepreneur here who’s a listener, who’s somebody who’s been listening, who gets it, who’s been following along and built something really successful, something so big that I want to interview him here so that you in my audience can get to listen and learn from him and ideally use what you learn and build a great company and come back here and do an interview about how you did it.

Now, imagine if you weren’t an entrepreneur though. Imagine if you were a venture capitalist looking at a lot of investments all day long and this guy walks into your office, a guy from Argentina. He says, “I have a great idea,” only he says it with a cool Argentine accent, but you know what I’m saying. He says, “I’ve got this great idea. It’s luggage.”

You go, “Dude, luggage? Do you see the iPhone? Do you see computers, the web? What are you doing, luggage?” He says, “Yeah, luggage.” And he goes on to tell you about his luggage idea. If you’re a venture capitalist, do you continue with that conversation or do you say, “Actually, I need to back away?” Well, if you continued with that conversation, you’d end up with a big hit on your hands because that’s what today’s guest actually built.

His name is Diego Saez Gil. He is the founder of Bluesmart. It is not just luggage, but really intelligent luggage. If you look at his website, Bluesmart.com, you’ll get to see how it works. I’m just going to read a few of the bullet points from the site. It lets you lock your luggage remotely. It lets you charge your devices–you know how when you’re sitting at the airport, you’re always in need of some charger, especially when the flight is delayed. In his case, the luggage will actually charge it. It lets you locate it if you ever lose it, and it will also let you weigh it so you know how much your luggage weighs.

All right. That’s what he built. Let’s find out how big the business is. The reason we can do all that is because I’ve got two incredible sponsors who are paying for ads here. The first will help you hire your next great developer. It’s called Toptal. The second will allow you to get your customers on the phone. It’s called Acuity Scheduling. I’ll tell you more about both of those later. But first, Diego, good to have you here.

Diego: Thank you very much for having me.

Andrew: You were smiling as I said all that. What are your revenues now? How much have you made with this luggage?

Diego: We have crossed over $10 million in revenue last year.

Andrew: Over how long?

Diego: A year and a half.

Andrew: A year and a half, $10 million in revenue?

Diego: Yeah.

Andrew: Wow. Did you actually have the kind of conversation that I imagine you might have had with an investor where you said, “Here it is, it’s luggage,” and they said, “Luggage?”

Diego: Actually yes. When we started, one of the things about building a hardware product is that it’s more difficult to bootstrap because you do need to manufacture and get some samples and start paying for physical products. So, at the beginning, we actually did a very small angel round before going and crowd funding, which we can talk about. Yes, we got a lot of these kinds of answers. And it was funny to see how they came back later saying like, “Wow, that was impressive how you pulled it.” Yeah.

Andrew: You are Argentine. You grew up in Northern Argentina?

Diego: That’s right, in Tucumán, which is in the north close to Bolivia.

Andrew: What’s that like over there?

Diego: Well, it’s an agricultural area. There are mountains. It’s beautiful, definitely a place to visit.

Andrew: And you didn’t so much have businesses growing up as you had a rock band that you treated like a startup.

Diego: Right.

Andrew: How’d you do that?

Diego: Yeah. I say that it’s one of my first entrepreneurial ventures because I learned to play the guitar, and then when I was in high school, we had the chance to form a band and we needed to get gigs, we needed to build our brand as a band. It was my first experience sort of like leading a project and I loved it. Then I said, “I want to do this,” but in other areas in business as well. That’s what made me want to be an entrepreneur.

Andrew: And the first real thing that you built came from when you were backpacking through Europe. I did that. I freaking love backpacking through Europe.

Diego: Right. Yeah.

Andrew: And you stayed in hostels, right?

Diego: That’s right.

Andrew: What was the experience of staying in hostels like for you?

Diego: Well, I was broke. I was traveling in Europe. I just got a scholarship to do a Master’s in Barcelona, but I really wanted to travel and see Europe. You have these cheap train tickets in Europe and then hostels. But then I loved it. I actually made so many friends from all over the world, and it was just like a very enriching experience.

Yes, that’s how I came out with the idea for my first startup, which was how can I use the internet and mobile to help young travelers book accommodations and connect with other travelers and find things to do along the way. That led me to cofound a company called WeHostels.

Andrew: And WeHostels was going to do what? It was going to be like Expedia for hostels?

Diego: That’s right. That’s what we did but with a focus on mobile. At the time, there were some websites, but you had to go to the computer of the hostel, and it wasn’t that easy to do, whereas everybody was starting to buy smartphones. That’s what we saw.

Andrew: Did you raise money for it? It seems like you did, right?

Diego: Yeah. We raised a seed round with that company. After we already had a product in the market, it was starting to get some traction. Yeah. It was a bunch of different angel investors.

Andrew: That was it? You didn’t do–did you raise $1.2 million? According to AngelList, that’s what you. . .

Diego: That’s right.

Andrew: You got $1.2 million to create like an Expedia for hostels all mobile?

Diego: Yeah.

Andrew: Okay. And that sounds actually pretty interesting. So I remember the hassle of finding hostels.

Diego: Yeah.

Andrew: I did it using a book. Frankly, they don’t change that much, right?

Diego: Right.

Andrew: But it’s still a bit of a hassle because you have to call them up to say, “Do you have room?”

Diego: Exactly.

Andrew: Is that what you were trying to solve?

Diego: Yeah. The fact that you are going along the way and you want to find kind of like easily a place that you can arrive that is going to be the most affordable and the most fun, right? So we figured all this information is kind of available there. We can put it out there and make it very easy to book from your phone.

Andrew: So that seems like a winning idea, right? People who are traveling are more open to new experiences, so if you offer them experiences–it feels like it’s a natural fit for advertisers, right? They might pay for tours. They might pay for side excursions. Why didn’t this thing work then?

Diego: It did work. At the same time, we were facing a lot of growing competition from Airbnb that was starting to get traction and from Booking.com and Expedia themselves, they were going into this kind of like more affordable accommodation like hostels and they were going strongly into mobile.

Andrew: Interesting.

Diego: So, at the beginning, we had really good traction because of the fact that we were mobile first, but then that advantage started diminishing. In that moment, we actually started looking for partnerships with some of these bigger travel companies and from one of those conversations came an acquisition offer.

Andrew: StudentUniverse.

Diego: Right, which is one of the largest travel agencies for students. It wasn’t a huge acquisition, but it was kind of like a good way for the company and the product to keep growing with the support of a bigger company that had the user base and the funds to keep growing the product.

Andrew: So someone who wants to travel through Europe would either go through a hostel or considers an alternative, Airbnb. To me, it feels like Airbnb and Expedia and the others are so different from a hostel. In a hostel, you get to be with a bunch of other people, kind of like a college experience I never had, versus Airbnb you’re on your own, mostly, right?

Diego: Yeah. Airbnb started, if you remember, as a couch surfing kind of thing. You rent a couch. So you could crash in some people’s places.

Andrew: So there was always a social element. Now I see they’re reintroducing the social element by having the host take you for excursions and so on.

Diego: Exactly.

Andrew: I see.

Diego: I agree that the hostel experience is definitely unique and it’s amazing, totally recommended, but yeah, today if you go to StudentUniverse, number one, you can book discounted flights. We actually built that mobile app after the acquisition, and you can also book hostels on their app, which is based on the app that we built before.

Andrew: All right. You talked to our producer and you said, “In confidence, we made some mistakes. If we’re going to be on Mixergy, I want to be open about the stuff that we didn’t do right.” And team was one of the big mistakes. Talk about the mistake there or the challenges that you had there.

Diego: Well, I think that team building is definitely one of the biggest things in a startup. You had to have the right people at the right time and be able to build kind of like a very strong bond between a team. At the time, we were kind of like we built a team that was spread out between different places that made it harder to build this sort of type culture that you want for a startup. I feel sometimes it’s really important to take the time to find the right people, as opposed to moving fast and hiring fast. So that was one of the things. We made tons of mistakes, a lot of mistakes and that’s the only way you learn.

Andrew: Just having them remote meant that you didn’t have the bond, but you also felt like you didn’t have the right skills in the people that you hired, right?

Diego: Yeah. None of us had the right skills. You do need to bring people that have skills that are different than yours and yes, I think that–

Andrew: All right. That’s kind of a startup thing. You get the people that you can, not the ideal people all the time.

Diego: Exactly. So then why don’t we focus on this whole idea of having a team that was remote and as a result, you couldn’t create a bond.

Andrew: Right. Why was that an issue and what did you do to try to deal with that?

Diego: Well, one of the things we did do was doing retreats every so often, but I do think that at the beginning, the core team needs to be together at the beginning. You need to have this sense of, “We’re all in the same boat. We’re working with hard together. We’re working 24/7.” That is very difficult to do when you’re remote. I do think that there are some companies that manage to do it or later on, you can different themes or different offices.

Andrew: Yeah.

Diego: But at the beginning, I think it’s very important to build together when you’re figuring out the product.

Andrew: Okay. All right. Then the other thing that you said was you had a hard time picking the right things to focus on. In fact, you probably spent a little too much time on PR.

Diego: Yeah. I do think that one of the biggest things in a startup at the beginning is you don’t have too much time and bandwidth to do too many things. So the distractions can be very hurtful. You need to focus on few things that are the most important ones.

Andrew: What should you have focused on if not PR?

Diego: I think you should focus on product. You should focus on customers. You should focus on marketing, but that’s like secondary.

Andrew: But if you focused on product, you still couldn’t have kept Airbnb from coming into your space. You couldn’t have kept Expedia from coming in. What would focusing on product have done for your business?

Diego: Well, figuring out faster which were the features that the customers wanted, iterating fast on that.

Andrew: When you did it right, do you remember one feature that you learned from your users you need to build and you built and it helped grow the business?

Diego: Yeah. I think in that particular case, it was about making it very easy to complete the transaction, to book. Reducing the friction on the mobile phone where this is a smaller screen–

Andrew: What’s a bit of friction you removed that helped increase sales?

Diego: Well, I remember that for example, one thing we did was the ability to take a photo of the credit card and take the numbers. We were one of the first to implement one of these features. And these kinds of things increased the conversion rate a lot and people loved it, as opposed to other features that we thought that people were going to want and they didn’t.

Andrew: Like what? What did you add that you thought people would want but they didn’t?

Diego: We did add some social features that were related to connecting with Facebook, which were cool in theory but then people didn’t really use it and didn’t really love it.

Andrew: Like what? What’s a social feature, who’s going to stay in town?

Diego: You could see who else was going to stay at the hostel.

Andrew: Why do you think people didn’t want that?

Diego: I think it was a security or sort of like a safety thing of like, “Wait, I’d prefer to arrive there and there I want to be social, but I don’t want to share my information before I arrive there.”

Andrew: That’s interesting, actually. I would have thought that’s something people want, but I think you’re right. I also would want a little bit more anonymity once I was there that one of the reasons of staying in a hostel is to make new friends and kind of be a new person at every different stop.

Diego: Right.

Andrew: Okay. I can see how that was all an issue. You sold the company. You told Pando at the time, Pando.com–here’s a quote, “I can tell you that our investors walked away happy.” For investors who put in $1.2 million, what does happy mean? Does it mean getting their money back? Does it mean 10x’ing? Talk in the abstract. They don’t just want their money back. They want a big exit. They do want the 10x. How do you make them happy if you don’t give them the 10x?

Diego: I think there is a difference between angel investors and venture capitalists. Venture capitalists, their business model is yes, they need a 10x because they’re going to invest in–first they invest in other money, but they invest other investors’ money. They manage other investors’ money and they know that they’re going to have a lot of losses, so they need the wins to be very big. In angel investors, it’s different because angel investors generally they are investing their own money. They are not–this is not their job.

Andrew: You had professional investors. You had Ventech. You had Quotidian Ventures. You had TA Ventures. Those aren’t guys who are looking to pat you on the back and say, “Good job.”

Diego: Absolutely. We had some–they were like still seed investors. I think that as I was going to say, most investors in venture have this model that many startups are going to die and then a few are going to be like–it’s like a [inaudible 00:15:04]–a few are going to be 10x or 20x or 1000x. Some other number are going to be like smaller returns and a lot are going to be losses. The earlier stage you are, the more okay you are with not 10x or 1000x.

Andrew: I see. Okay.

Diego: They are definitely happier to have a return then to losing money.

Andrew: Did you make money on it?

Diego: I did make some money.

Andrew: Like tens of thousands of dollars?

Diego: I was able to pay all my student debts and have some paychecks after a lot of years of hard work.

Andrew: Did you pay the student debts off of the sale price or off of the salary you collected afterwards?

Diego: Off of the money that I made.

Andrew: From the salary?

Diego: Yeah.

Andrew: I see.

Diego: No, from the exit.

Andrew: From the exit. Oh, so it was a nice exit. So, if you’re getting paid, investors got paid, everything is good. By the way, I’ve got to tell you, Pando does some really good work. I don’t know why Pando just never fully took off. I’ve got to get Sarah Lacy on here sometime to just talk about that. The other thing that I discovered was the company used to be called InBed.me, which is a freaking great name.

Diego: That’s right.

Andrew: You had to change it when, when the investors came in?

Diego: No. I think from talking to users, we noticed there was some positive and negative perceptions.

Andrew: Right. I imagine a lot of women are not looking to go to a hostel where they’re potentially going to fall into bed with someone.

Diego: Right.

Andrew: It is kind of a scary situation, frankly, hostels.

Diego: Right.

Andrew: But I did have some of the best times in my life at hostels. I never went away to college. I’m the kind of person who said I know it’s kind of childish to stay at home, but if it means that I’m going to save more money and focus on my business and have a better life for myself after college, I’m going to stay at home. I stayed at home, I worked like mad. I wasn’t loving the fact that I didn’t go out, but I didn’t care that much. I think it was ultimately good for my business when I started it after school, but I did feel like I missed out on the whole college dorm experience and going out and staying at hostels and backpacking gave me that feel.

Diego: Absolutely. I think everyone should do it. It’s a great life experience.

Andrew: Diego, is it inappropriate for me to ask you if you’re a millionaire now because of this business?

Diego: It’s not inappropriate, but no, I’m not.

Andrew: You’re not? $10 million, what does that mean? How much did you make in profit from this?

Diego: From what?

Andrew: From Bluesmart?

Diego: Oh, from Bluesmart? Bluesmart still hasn’t exited the company.

Andrew: Okay. And you guys are profitable?

Diego: We are not profitable yet. We are close to.

Andrew: Close to profitability. Okay. Where does the majority of money go outside of cost of goods sold?

Diego: Product development, research and development. We need to be working on new products.

Andrew: More so even than marketing?

Diego: Yes.

Andrew: Wow.

Diego: I think that in every consumer electronics product, you have to be investing a lot on being one step ahead of the competition. So we are actually working hard on new products. We think that’s going to be what is going to bring a lot of value in the future.

Andrew: And your big vision is what, to be like the Samsonite luggage? Is Samsonite actually a valuable company?

Diego: Oh yeah. They are a $4 billion company.

Andrew: $4 billion. So, if you can become like Samsonite, that would be a huge exit?

Diego: I think so. It’s a very large industry. People travel a lot. I think it’s $32 billion in revenue worldwide in the luggage space. We saw this is a very large industry. We can bring a lot of innovation, a lot of fresh ideas and technology into the space and hopefully make the life of travelers better.

Andrew: I see. Samsonite is a Hong Kong company, not a U.S.?

Diego: They started in the U.S., but now they’re a public company in Hong Kong.

Andrew: Okay. All right. So we’ll find out how you came up with this idea in a moment, but first I’ve got to tell you that I feel awful about this. Yesterday I had tons of paperwork in my office. I hired a woman to sit here for hours and do nothing but scan everything into my computer and toss it out. And as she did it, she accidentally tossed out and then had shredded this card that I got from a guy named James Ashenhurst. I really appreciated it.

I’m so pissed it’s gone because James sent me a note and it said, “I’ve been putting this off for too long.” And this is a guy who sat down and wrote by hand in a digital world. He said, “Andrew, I’ve been putting this off for too long. I used Toptal.” He said he had this business. He had an issue with the search.

So he hired Toptal to help fix the user experience. They paired him up with a guy named Stratos. Stratos did a fantastic job. They fixed search. They really end up improving his business, and he’s so happy about it that he sent me a note by hand to tell me. That’s the interesting part, first of all that he had a problem for a long time, couldn’t find other people to solve it.

James is a freaking smart guy. I interviewed him on Mixergy. He could find people who are good. He wanted someone great. That’s the hard part. The other thing that stands out for me about his card is he included the name of the developer. A lot of times when you look for developers that are just working on an individual project, you think of them as the project people and you think of them maybe as the people you found through some freelance site.

No. James told Toptal what his problem was, told them what he was looking for. Toptal went out and found the right person for him to match his temperament, the length of the project he was working on and the way they wanted to work with the person. They matched him up. James got a match and they were able to work together and build their business. That’s the incredible part about Toptal. Do you know Toptal outside of Mixergy?

Diego: I do. Yes. As we were talking, I think that finding the right people is a key thing on startups. So it’s great.

Andrew: Yeah. It’s interesting. I often emphasize the intelligence of these people. It’s more than that. It’s the right person for your business that Toptal does, which is why the first thing that somebody sees when they go to Toptal is an onboarding process that includes a phone call with a real human being at Toptal. They want to understand what you’re looking to do. Then they go into their network and they match you up with the right person. It’s all very handmade, hand done, all done by hand.

Diego: Right.

Andrew: To the point where if you’re out there and you’re listening to me and you want to find the right developer for a project the way that James did for a full-time gig, for a team of developers who are going to help you out and you want an intro, I’d be more than happy to introduce you to a guy I’ve known at Toptal for years. So, I’ll give you my email address and then I’ll give you a special URL. You pick whichever one you want, the personal touch from me or the direct Toptal link you can go and get on the web.

My email address is Andrew@Mixergy.com, super easy, right? Andrew@Mixergy.com. And if you want to go directly to their website–actually regardless of whether you do it from their website or through me, here’s what they’re giving Mixergy listeners–80 hours of Toptal developer credit when they pay for their first 80 hours. So, if you’re listening to me, you can get 80 hours of Toptal developer credit and that’s in addition to a no risk trial period of up to two weeks.

They’re so convinced they’re going to match you with the right person they are giving you a 100% satisfaction guaranteed offer. Go to Toptal.com/Mixergy. I listen to myself, by the way, Diego, from time to time. I realized I do jumble the name Toptal. I have to slow down and say Top-tal and maybe even say top as in top of the mountain, tal as in talent or maybe even say Toptal.com/Mixergy. Great sponsor. I’m glad to have them.

The idea came to you when you lost your luggage. How did you lose your luggage?

Diego: So I was going to Argentina to visit my family for Christmas, and I was bringing a bunch of gifts in my suitcase. We had a stop in Panama, I think. I think there is where the suitcase rerouted to another airplane or I don’t know. And then when I made it to Buenos Aires, I was waiting in the carousel and the suitcase never made it. I didn’t have any clothing. I didn’t have any gifts for my family for Christmas, so it was like a big problem. That got me thinking how come there is not a way for the airlines to know where the suitcases go. Then I did some research. It turns out that 25 million get lost every year.

Andrew: It’s a big problem. Let me ask you this. 25 million bags get lost every year?

Diego: Yeah.

Andrew: Really?

Diego: Yeah.

Andrew: We’re talking about at airports?

Diego: Yes. 25 million bags get reported lost to airlines by travelers.

Andrew: Wow. Okay. That is a lot. But here’s the thing though–

Diego: I think it’s one every 150 passengers.

Andrew: I still don’t think of it as a problem and probably won’t until it happens to me and then if it does, it’s kind of an inconvenience because they eventually give it back to me. So that’s not the market opportunity, is it?

Diego: Well, I think it’s these kinds of things that if it ever happens to you or if it happened to someone that you know, you know how problematic it is.

Andrew: I see.

Diego: So you want to avoid it next time.

Andrew: So why didn’t you say, “I’m going to create a beacon of some kind that will help people go and find whatever they lost, whether it’s luggage or a purse or something else? Why did you then jump to the, “I’m going to create luggage?”

Diego: Because that was sort of like one of the ideas, but then that got us thinking–again, then I kind of got together with a group of friends that are my cofounders. We started thinking this is just one thing of a lot of things that can be done to reimagine what the suitcase is in this century with the technology that we have available today, the same way that Apple is reimagining the watch and making it a computer that does all these other things, we could take on this space and try to reimagine the entire product experience with these technologies and come out with a lot of different features.

Andrew: What was it about luggage that excited you as a product?

Diego: Well, I was a travel geek. I loved traveling.

Andrew: I see.

Diego: I always loved physical products and at the time, actually, when I was a backpacker, my only belongings were either a backpack or a suitcase. I used to say I live out of a suitcase.

Andrew: So you minimize your stuff to the point of fitting in a bag and that was it.

Diego: Exactly. I am still trying to do that, by the way. I allow all of my belongings in one or two suitcases.

Andrew: Where are you today?

Diego: Right now I’m in San Francisco, but I’m living in New York.

Andrew: I see. Are you in an Airbnb?

Diego: No. I’m actually at a friend’s apartment crashing.

Andrew: Are you here for SaaStr?

Diego: No. I just came to have a few meetings.

Andrew: Got it. Okay. So you had this idea. You then had to create some kind of a prototype, right?

Diego: Yes.

Andrew: What did you put into the prototype?

Diego: So we did several prototypes. One was sort of like an Arduino electronics prototype that we attached to a bag. Another was sort of like–

Andrew: And that’s like basically before you go to the next one, that’s basically a small computer that you can program to do anything and it doesn’t matter if you lose it or you break it because it’s so inexpensive. What did you have that little device do for you?

Diego: We then got off-the-shelf components to do the location tracking, to do the locking and unlocking mechanism, which is basically an electro mechanic actuator that locks and unlocks. We had a battery. We had a lithium ion battery. We were testing out things.

Andrew: I see. I’ve never played with it. But when I hear you talk about it, it’s like Lego for adults. That’s really clever.

Diego: That’s right. Exactly.

Andrew: So how did you do location tracking? Was it going to be within Bluetooth range, or did you have some other vision for it?

Diego: At the beginning, we had to research what were the possibilities. We ended up finding that the solution to actually make it work worldwide was to do it with a SIM card and basically use a cellular network so that we can basically sort of like send a text message to the bag, wake it up and then use GPS, which uses satellites to triangulate the location and then send a text message back to the server with a location.

Andrew: That’s how it works today?

Diego: Yeah. That’s how it works.

Andrew: You use a SIM card in the bag.

Diego: That’s right.

Andrew: This is like real stuff.

Diego: Yeah.

Andrew: Wow. So you have to have a SIM card. What does it cost you to have a SIM card that basically is on forever?

Diego: Well, we did a partnership with Telefónica, which is a big telecom.

Andrew: Yeah.

Diego: Sorry. Let me plug in the–

Andrew: I saw that you’ve got some kind of anxiety going on there.

Diego: Yeah.

Andrew: I’m wondering, I thought maybe your friend needs you out of the house.

Diego: No. It’s one person battery.

Andrew: What are you, on the new MacBook?

Diego: Yeah, it’s a MacBook.

Andrew: Is it the new MacBook Pro, the one whose battery issues people have been talking about?

Diego: It’s a MacBook Pro from a year ago.

Andrew: Okay. This is before the whole battery issues that people have been bringing up.

Diego: Yeah.

Andrew: So you made a deal with Telefónica.

Diego: Right. So we pay for the activation and the data for the SIM card. We don’t charge that to the consumer. We sort of include it in the cost of the product.

Andrew: And it’s forever.

Diego: It’s forever. Yes.

Andrew: But you only have to pay whenever you actually interact with the device.

Diego: That’s right. We’re programming it in a way in which it gathers the location every so often and it sends the location back when you ask it. This is the moment in which it uses data.

Andrew: I see. That’s all you pay for. What does it cost to do that per bag, would you say?

Diego: They charge you per byte of data you send, so a few dollars.

Andrew: Okay. So that’s not so much then. Wow. I thought it would be a much bigger undertaking. That’s worldwide even though with Telefónica is. . .

Diego: It’s worldwide. They have roaming partnerships in 124 countries.

Andrew: Killer. Okay. I see. You said, “That’s got to be in the first one.” Why does locking have to be in the first one? Who needs to lock their bag remotely?

Diego: Locking was about–we talk a lot with potential users at the time and trying to identify what were the problems. We identified that there were two things people wanted. On one hand, you wanted peace of mind related to, “I don’t want to lose my things. These are the most important things I’m traveling with.” On the other hand, they wanted convenience. Convenience was about going through security, accessing their devices, charging their phone and these kinds of things. So we designed the features to address these two needs.

Andrew: I see. And what about charging? Why not just let people throw in a battery in there? Why do they need to build it into the bag?

Diego: Because we already needed a battery to power the system.

Andrew: I see. So you might as well make it user accessible.

Diego: Just make it bigger. We are so much in need of batteries today that let’s just put a [inaudible 00:30:52] and let’s let people do it.

Andrew: I think a lot about all the cool gadgets inside of it even though it doesn’t look like a gadget bag, but what I read a lot from people who are fans of the bag is the wheels are really good.

Diego: Right. Well, yes, we also learned that for these kinds of products, the design both from a how it looks perspective and how it works properties, it’s super important. We were also excited about that. Let’s bring a new spin into how a suitcase should look like in the 21st century.

Andrew: How did you know how to make wheels that worked that well? I get that you’re a geek to some degree and Arduino is–I never can pronounce it right–Arduino is like a fun thing to play with. But what about the design of the wheels? Where did you learn how to do that?

Diego: Well, we started building a team with different skill sets and we brought on board a really good industrial designer. He’s the one that came out with a wheels idea.

Andrew: Where’d you find the industrial designer?

Diego: He is an Argentina guy who was a friend of one of our cofounders.

Andrew: Okay.

Diego: He’s the one who came up with the wheels idea, and then he did incredible work to make it happen.

Andrew: Did you raise money at that point or after you had your first prototype?

Diego: We raised an angel round before going on to crowdfunding. Through crowdfunding, we arrived at a prototype that was like a working prototype but still needed some development.

Andrew: Okay. This was before Y Combinator?

Diego: Right.

Andrew: Okay. How much did you raise at that point?

Diego: We raised $300k.

Andrew: Just to create that first thing that you ended up showing on Indiegogo.

Diego: Right.

Andrew: Why’d you go to Indiegogo?

Diego: Well, we looked at two platforms, Kickstarter and Indiegogo. One thing was that we really liked the people at Indiegogo. I actually sent an email to the two and in Indiegogo they were like, “This is so exciting. We love this product. We’re going to help you out.” It was just like a personal connection with someone at Indiegogo. And then second, because we’re from Argentina and we knew that we could have a lot of friends in Argentina who would back us, Indiegogo is more international. They have payments for international services. I think those were the main reasons.

Andrew: So you put it on there. You did shoot a good video. How much money did you spend on your video?

Diego: We did the video in Buenos Aires, which is very cheap. It looks like an airport, but it’s actually a cruise ship terminal that was empty on the winter. We got someone to let us in and we shoot the video there.

Andrew: So you packed it with all those people?

Diego: All those people are friends and family.

Andrew: Really?

Diego: Yes, friends and family of the founders.

Andrew: Acting like extras?

Diego: Yes.

Andrew: Really? Okay. That’s a pretty full little airport.

Diego: Yeah. The place was completely empty otherwise.

Andrew: They’re all Argentine?

Diego: They’re all Argentines. We made it look like JFK. We tried to make it look like JFK. So I think the video cost $5,000 in cash and then some promises of money in the future to some other people.

Andrew: This is really well done. Didn’t the flaps close on their own in the video?

Diego: Right.

Andrew: I guess you just gave it to the videographer and you tell him to do it?

Diego: Yeah. We had really good people helping us with the editing and the post production.

Andrew: Okay. And you said, “You know what? Internally we have this goal. We think we’re going to raise $50,000,” but you told your investors, “We’re going to do $500,000 with this.” Is that right?

Diego: Exactly.

Andrew: Why did you sell it so much to your investors? Why did you make such a big promise to them?

Diego: Because we thought that it was possible. It was difficult, but possible. We thought that this was–frankly less than that, it would have been difficult to make it look like this had the potential to go and raise more capital and be a successful company, you know?

Andrew: Okay.

Diego: Yeah.

Andrew: So you then hit how much total?

Diego: In total it was $2.2 million.

Andrew: $2.2 million?

Diego: Yeah.

Andrew: So, before we started, I said, “Come on, Diego, you’ve got to tell me more than just we went on Indiegogo and it hit big. What else did you do?” And you started telling me about Dynamo. You started telling me about this LinkedIn thing you did. You said, “Here’s what Indiegogo did for us that we couldn’t duplicate without them.”

Diego: Right.

Andrew: Let me talk about my second sponsor and then we’ll get into the details of how you promoted it within Indiegogo and then also outside of Indiegogo and how you grew the business.

First I’ve got to tell people that–actually, I should tell you, Diego. So, I got really excited about messenger bots a few months ago, actually about a year ago. I said, “Does anyone at Mixergy want to learn it?” I thought I could send out a survey but that’s not enough. So, I did a survey and said, “Do you want to learn it?” and when people said yes, I said, “Would you pay to learn it?” When they said yes, I said, “Great, pay a deposit.”

Diego: Nice.

Andrew: So, people paid a deposit and at that point, I could have said, “I have enough information to tell me we should be teaching it,” but I said no. I want to actually talk to these people and see what they want to learn about messenger bots and messenger experiences. I said, “How do I talk to all these people? 30+ people paid–how do I schedule it around all my interviews and other stuff? I’ve got kids and there are people all over the world who are into Mixergy.”

So I went to Acuity Scheduling and I created a whole new calendar in Acuity Scheduling, which basically means they already have my existing Google calendars, LinkedIn so they know when I’m busy and when I’m free. I said, “Look, Monday through Friday, I’m available at these times. Saturday and Sunday here’s when I’m going to be available to make phone calls. Here are the days I absolutely don’t want to talk to anybody. I want to just grow a beard and sit in the office quietly working.” And I did all that.

And then they gave me a URL that I could have given people, but I wanted it to look like it was part of Mixergy. So, I took the embed code from Acuity Scheduling. I put it on a Mixergy page so it looks like it’s all completely part of Mixergy. I went to every one of the people who paid $30 and I said, “Hey, can we get on a call?” and they all had a link they could go on my site where they could pick out of my calendar.

Diego: That’s very cool.

Andrew: If one of them picked the date, the other person couldn’t pick it. If one of them happened to be in Singapore, which someone was, he sees it in his time zone, not in Pacific time zone. I need to know their phone number because I’m not dicking around here between phone calls. I have it on my calendar. I want their phone number. So, I asked for their phone number.

So the time came. I had a calendar full of calls. I get to look through my calendar, see who my next call is with, see their phone number, instantly dial it, boom, I’m ready to roll. If I want to do even more like send all that data into my CRM, which actually I ended up doing, you could do it because there are tons of integrations with Acuity Scheduling.

Diego: I see. I scheduled this call with Acuity and it was really professional looking and really convenient.

Andrew: That’s important to me because that’s your first impression of your relationship with me that you go to this page where you get to book. If it’s a hassle to book with me, you’re not going to. So how does this relate to our audience? The way it relates to our audience is we all want to get people on the phone at times. If we say, “Hey, are you free on Monday at 6:00 p.m.?” they don’t know is it 6:00 p.m. their time or our time.

Diego: Right.

Andrew: It could actually be that they take three days to say yes or no and in those six days, you’re locking in Monday at 6:00 p.m. because you don’t want anyone else to book. It’s a hassle, which is why people don’t get on phones enough.

Diego: Yeah.

Andrew: Or maybe you have this new product and you want to get on the phone with every new customer so that you onboard them properly, understand why they buy from you. How do you do that? Well, Acuity Scheduling lets you do it. Yes, there are lots of other options you can use, but the reason I like Acuity is anyone on my team can use it because it’s super simple. It has integrations with everything and anyone listening to me knows I love playing around with software to see how I can be more efficient or have my team play with software to see how they can make me more efficient.

I also like that if I were to continue making these calls with people about bots, I could very easily slide someone else from my team onto my calendar. The user would not even know who it was. They’d just know that they’d book a time. That was a little complicated. Let me explain it this way, Diego. I used to have one producer talk to people before interviews.

Diego: I see. Right.

Andrew: I then needed another one. I didn’t want to have to give people like you, Diego, two calendars and say, “Diego, pick producer one or producer two.” You don’t know which one.

Diego: I see.

Andrew: So what I do is I mesh both their availabilities in one calendar. You see their available time. You pick it. And whichever person happens to be free at that time who made that time available, you get to talk to them.

Diego: Wow, that’s really cool, actually.

Andrew: Yeah. It’s just fantastic. Anyone out there who wants to talk to people one on one may be added as part of your onboarding process. Maybe you’re doing webinars and you want to include multiple people on. Whatever it is, you’ve got to check out Acuity Scheduling. It’s created by a long-time Mixergy fan. I used it from the beginning of–no, not the beginning. The beginning was hectic and then we switched to Acuity and things stopped being so hectic.

If you want it because it’s created by a Mixergy fan, he’s giving us a special offer. All you have to do is go to AcuityScheduling.com/Mixergy, AcuityScheduling.com/Mixergy and get it. That means you’re going to get a 45-day trial. I could frankly have sold all of those people who put down a $30 deposit within 45 days and closed out my account with Acuity. That’s how generous that free time is.

If you’re listening to me and you want to use it, go ahead and use it within 45 days. You’ll probably close some sales and maybe not even need to use it again or maybe you’ll be like me. You’re fall in love with it because it organizes your company and grows your sales. Check out AcuityScheduling.com/Mixergy.

What’s Dynamo?

Diego: So it’s a PR firm from London that we hired to help us get the word out about the organization when we launched on crowdfunding.

Andrew: Do they focus on crowdfunding? It seems like they do Kickstarter–

Diego: Yeah. That’s one of their verticals. That’s the reason why we were with them.

Andrew: What kind of PR do they do?

Diego: So it’s basically reaching out to newspapers and blogs and different media outlets before you launch a campaign so that you try to have as many as ten covering the crowdfunding campaign the first week. Crowdfunding campaign is like if you don’t get traction the first week, it’s very difficult to get traction afterwards. You need to have as much momentum at the beginning. So that helped a lot.

Andrew: What did they get you?

Diego: We got into Mashable, Engadget, TechCrunch. Then the more mainstream ones, they only will write about you after you got some milestones. Like we were on CNN and BBC but after we passed $500,000 or $1 million.

Andrew: Yeah. It’s interesting. We did a course for Mixergy Premium about how to promote crowdfunding campaigns from someone who had done it really well several times, the founder of Hidden Radio. He said there are some blogs that will not cover you after you hit your goal. It’s too late for them. Then there are others who only will cover you after you hit it.

Diego: That’s exactly right.

Andrew: Then there are people like me, who are dicks who will not have you on for like a year afterwards because I want to make sure it’s not just an interview about that one campaign. That’s how having a PR firm helps.

Diego: One thing that also changed is that there have been a lot of projects that never deliver the products. That is not good for the crowdfunding world. But that’s important to arrive to crowdfunding at a moment in which you know you can make the product and deliver it.

Andrew: So, by the way, I’m looking at this Mashable article–5,400 shares on the article. That’s really cool.

Diego: Oh, wow.

Andrew: Your cofounder, Tomi, is talking about how he also had a couple of bad experiences with luggage. Let me ask you this. Be completely open with me. It feels like you guys have a nice origin story in, “I lost my luggage once.” How much of it is origin story to describe the story in a way that’s sticky to the audience and how much is the truth varied from that?

Diego: No. It’s definitely something that happened and what got the initial spark of the idea. But then origin stories are much more complex and definitely–so that was like the spark of the idea. I got together in New York to have a coffee with Tomi and Tomi was actually a hardware entrepreneur. He had done another hardware startup before, whereas I had done a software startup.

Andrew: I see.

Diego: I would never have started a hardware startup if it wasn’t for him, who told me, “Dude, this is a genius idea. We can also put this and this and that.” He actually kind of like exploded what the idea could be and then together we decided to make it happen. Then Alejo came on board and Brian and Martin were the other founding team members.

Andrew: All right. Mashable and Gizmodo and so on–what’s the place that sent you the most users?

Diego: Mashable, CNET, I remember.

Andrew: You actually got customers from CNET?

Diego: Yeah.

Andrew: Can you actually trace that? You can? Okay.

Diego: Yeah, totally. CNET, Engadget, that first week, then TechCrunch wrote a little bit later. Sometimes there were some blogs I didn’t know about, but they brought a lot traffic as well, like BostInno, Boston Innovation, BostInno.com brought a lot of traffic. So, in that sense, you had to have the PR firm reaching out to a very wide range of media outlets.

Andrew: If you saw me space out for a second it’s because I’ve been looking at Tomi’s LinkedIn portfolio. I see his background why he’d be a good fit. The company that he had before–boy, this guy loves the color blue. He’s got to. Every freaking thing in here–Little Blue is a company that he worked for–he cofounded Little Blue. Little Blue makes student clothing in Latin America.

Diego: Yes.

Andrew: He then cofounded Big Blue, which is a design company for Fortune 500 companies. He worked with Disney and Coca Cola and now Bluesmart. That’s where the blue comes from and that’s where the design and product comes from.

Diego: So when we were thinking about names, he said like, “The only thing that I have is it has to be the word blue on the name.”

Andrew: Why? What’s with blue?

Diego: He just loves the color blue. I happen also to love the color blue and I said, “Okay, I’m fine with that.”

Andrew: Plus the guy looks like Jony Ive, am I right?

Diego: Yes, a little bit.

Andrew: He’s got a Jony Ive haircut, he wears the Jony Ive t-shirt, at least in his LinkedIn portfolio.

Diego: Right.

Andrew: Did they also at Dynamo help you tell your story better? I do notice a very disciplined way you explained it in lots of different places.

Diego: Yeah, definitely. I think one of the challenges at the beginning is that you need an outside view of how you are communicating with the product. We actually spend a lot of time, especially for the script for the video, making sure that we could communicate in a very concise way what were the benefits of the product.

Andrew: How do you do it? What’s the way that now you say it?

Diego: Well, the way is that instead of listing features, you go and describe your problem and solution, a problem and solution.

Andrew: Can you do it now? What are the problems and solutions to describe the features?

Diego: 25 million bags get lost every year. We have GPS location tracking worldwide. Run out of battery at an airport is a pain. Life is too short to fight for an outlet at the airport, a 10,000 milliamp battery charger on your suitcase all the time.

Andrew: I see. Okay. It’s not just, “We have a 10,000 milliamp battery.” It’s what’s the problem and how it solves it. Got it. Okay. What happens now when people are going from USB A to USB C and now all the devices are going to be USB C. Is this going to be a situation where people are going to have to throw away their luggage every time there’s a hardware update?

Diego: I think there’s going to be for a long time backward compatibility. But technology evolves. Luggage is something that people renew every two years.

Andrew: It is?

Diego: Yeah, because suitcases get beaten up. Frequent travelers renew every two years.

Andrew: Okay. The other thing that you did was you went into your LinkedIn portfolio. You found all the people you were connected with. I see that you’ve got over 500 people. Once you hit 500, LinkedIn says, “That’s it, I’m stopping the count.” It’s not a measuring contest. But what most people don’t know is you actually get all those email addresses out of LinkedIn, right?

Diego: There’s a way to download everything on a Excel sheet. You can do the same with Facebook, by the way, too.

Andrew: I can get the email addresses of people on Facebook?

Diego: The way to do it–

Andrew: Tell me.

Diego: You actually have to connect with Yahoo and move everything to Yahoo and then from Yahoo you download it.

Andrew: Okay. When you say move everything to Yahoo, what do you mean?

Diego: So you have to have a Yahoo email account, which I think I created one to do that. And then you say, “Upload Facebook contacts to Yahoo contacts.” And then from Yahoo, you download the list. If you Google–

Andrew: Yes, it came up. It wasn’t the first result, but if I Googled it, it definitely came up. It’s on Labnol.org if anyone wants it or frankly just Google, “Export Facebook contacts to Yahoo.” I had no idea this was a thing.

Diego: I did that with LinkedIn and with Gmail. Then I had this very long list of all the people who I ever met. Then I emailed all of them letting them know about this project.

Andrew: Did you do it individual, or did you upload it to something?

Diego: I did it on MailChimp, I think.

Andrew: MailChimp. I see. Did you get into trouble with MailChimp because these people didn’t sign up for it?

Diego: No, because it was a personal note. It has an unsubscribe thing. One thing that I did do–I remember because again, I grew up in Argentina, I went to school in Spain and then I lived in the U.S. So half of my people speak Spanish, half my people speak English. I went one by one separating English/Spanish and then I wrote two emails, one in English, another in Spanish to personalize it.

Andrew: Through thousands of emails.

Diego: Yeah.

Andrew: By the way, this guy who wrote the article about getting email addresses from Facebook into Yahoo, his name is Amit Agarwal. This guy is freaking brilliant. Every time there’s something wacky I want to do, he not only writes a solution, but he gives you the answer. I’ll tell you one thing I wanted to do.

I need an easy way to forward messages to my assistant. Like to unsubscribe me from something, I don’t even want to hit the unsubscribe if I can avoid it. He has this script that you upload to Google Drive that connects to Gmail that as soon as you tag a message with something, it automatically forward it to an email address.

Diego: Nice.

Andrew: So I just tag it with assistant and it automatically forward it with forwards it to my assistant, which is fan-freaking-tastic.

Diego: Very cool.

Andrew: He’s just brilliant. I can’t imagine he’s making money on all of this stuff. He created the whole script. All I had to do was copy it into my Google Drive. He’s brilliant. I had to let people know about that. You’ve got to know this guy’s got good stuff out there for you. So that got you some customers. Do you have any sense of how many customers you got from that?

Diego: No because there is still no way to know. But we got kind of like the initial start of the friends and family supporting you and then the press came and then it was kind of like a combination of all that.

Andrew: And then Indiegogo has a newsletter. What did you do with them?

Diego: Right. Then a few days later because the campaign was getting a lot of traction, Indiegogo generally takes the campaigns that are hot and then they send a newsletter saying these are the hot campaigns of the week. We got a place there. That helped us a lot too.

Andrew: Any other hacks? I talked to a woman who was on Kickstarter that said if she could get a lot of people to even donate $1, that adds momentum in Kickstarter which helped her get more attention in the Kickstarter rankings. Did you do anything like that?

Diego: Yes. I think that we did ask everyone, “Look, if you don’t like the product or don’t have the money to pre-order the product today, help us with a dollar or help us with sharing it.”

Andrew: Because the dollar helps with tracking or rankings there?

Diego: Yeah. I think it’s part of it. You need to create sort of like a sense of momentum that many people are supporting it.

Andrew: How did you know all this stuff? Is it Dynamo that helped you understand it, or did you interview people who were–

Diego: Well, we did a lot of research, but I also remember reaching out to a few people who have done campaigns successfully and asking them their tips.

Andrew: “What do we do?” Okay. I can see that’s really helpful.

Diego: For example, I reached out to a guy called Jake who did a company called Electric Objects and raised almost $1 million on Kickstarter. He was very helpful in giving me some tips. Now we try to do the same when someone comes to me, pay it forward.

Andrew: You’re doing it right here now with tens of thousands of people, hundreds of thousands of people.

Diego: Right.

Andrew: You mentioned earlier the product. The first version was Arduino on a regular piece of luggage. The next version I think was cardboard or something?

Diego: Yeah. We did put together a lot of different cardboard things and things like that. Then it was really going to China and started meeting with factories that could manufacture the product and then building prototypes with them.

Andrew: How did you find the right factories to go to?

Diego: That was Tomi, frankly. That’s part of his skills, that he’ll go to China and find factories. It was asking a lot of people that we knew who could be the right factory and visiting a lot. I think the one trip, Alejo and Tomi went to China and visited like 26 factories. None of them ended up being the right factory, but it was just a numbers game.

Andrew: I get that. When you’re making these different samples at each factory, what does that cost you and how much time does it take?

Diego: It costs a couple of thousand dollars. It takes generally a couple if weeks, sometimes a couple of months. So that’s one of the challenges of hardware. Things are more expensive and slower. You don’t want to waste time taking too long on samples.

Andrew: So you seem to be doing well on your own. Why did you go to Y Combinator?

Diego: Well, as you said at the beginning, you need to–hardware companies need to raise capital because it’s capital intensive. For us, it was about getting as much valuation as possible. The crowdfunding campaign was one validation point. Going to Y Combinator was another validation point. And then frankly I did think and I definitely confirmed that the mentorship and the advice that you get form the partners and the community is super valuable.

Andrew: They’re legendary for that. Do you have a story of what you got from them, one experience that changed your business or product?

Diego: Well, you know how we were talking at the beginning about the distractions, of not focusing on the right things. One of the things that the partners at YC are really good at is that all the time reminding you what you need to focus on. So you have like these weekly office hours with partners. They’ll tell, “What did you do this week?” Then you tell them why you focus on the thing that is not–

Andrew: Like what? What did you not need to focus on that they needed to get you back on track?

Diego: Going to conferences or trying to do a partnership deal when you don’t have a product in the market yet and these kinds of things. So, in the beginning, it’s just product and talking to customers and putting the product out there.

Andrew: Nothing but product and talking to customers. If you said something else like, “We’re going to talk to Engadget because one day we might want the Engadget writer to report, no. They say stop that?

Diego: Yeah. Absolutely.

Andrew: I see. By the way, speaking of mentors and advisors, Patrick McGinnis is the guy who introduced us. He’s the author of the “The 10% Entrepreneur.”

Diego: Yes. He’s been an investor in my two companies.

Andrew: Oh, so that’s your connection with him.

Diego: Yes.

Andrew: What do you think his interest is in this book–he’s got this idea that you don’t have to quit your job, you can do this in your part time. What do you think of that approach?

Diego: I like it. When he told me about the idea, I said, well, this is actually not uncommon in Latin America because in Latin America, you need to have additional income. Jobs don’t pay very well. So I like this idea of–I think it’s a really good way for people to test the waters of entrepreneurship and then go full on. I don’t buy it necessarily on the idea that you need to quit everything and then start a company. I think many startups start as a side project, as an idea they start exploring with friends and then you go full on.

Andrew: I’ve noticed that too, “The 10% Entrepreneur,” that’s the name of the book.

Diego: Yeah.

Andrew: So you got into Y Combinator. They helped focus you. You went through Indiegogo. That gave you tremendous recognition. I thought for a while I was seeing you everywhere. There was one week where you were everywhere. We talked about how I saw you on Product Hunt, where they don’t feature hardware anymore, but at the time it was a thing.

Diego: Right.

Andrew: So what shocked me was you seemed to be on fire. What happened when you guys nearly ran out of money?

Diego: Well, the thing is that hardware is capital intensive. There is a working capital component that you are investing in, in having a lot of products being manufactured or being shipped to customers and the more you sell, the more money you need on a hardware company. Yes. As we started shipping a product, we started selling very well, but we needed more money and we had to go and do fundraising again and it was hard.

Last year was a hard year for hardware startups in general and for fundraising in general. Fundraising is never easy, to be honest. But last year I think it was particularly hard. So it took longer than expected, but this is a moment in which persistence is the most important value that you need as an entrepreneur and we persisted through it and we ended up finding investors at the end, but it was rough during the time.

Andrew: When you finally raised money, who’d you raise money from?

Diego: So we raised money from a combination of Chinese investors, Silicon Valley investors and Latin American investors.

Andrew: How’d you end up with the Chinese investors?

Diego: Well, because we have office in Hong Kong now. We manufacture in China. I went there and I started meeting investors there as well. Investors in China love hardware, actually, because that’s what they do. They manufacture products. We found a fund that had a thesis around connected devices and it was a really good fit and we ended up partnering with them.

Andrew: You’re a guy who’s traveling a lot. How do you stay in the U.S. as an Argentine citizen?

Diego: I have a green card now.

Andrew: I see. Okay. Wow. You must feel really like lucky to have that.

Diego: Yeah. Absolutely.

Andrew: When did you get your green card?

Diego: A few years ago.

Andrew: This is before you started Bluesmart?

Diego: Yeah.

Andrew: Okay.

Diego: But we had a lot of stories with Bluesmart of applying for visas for people to come here, getting rejected or taking too long. Immigration is something that–

Andrew: I hear that all the time. Is it easy to get into China and Hong Kong and just travel the world as much as you do?

Diego: Hong Kong is really easy, actually, to get a job even. China, to visit the country, you need to get visas. They give you two entries and then you need to renew it. But yeah, it’s always a challenge.

Andrew: I remember being in Argentina and every three months we had to go to Chile for just like a minute. You just cross the border–you know the drill, right?

Diego: Right.

Andrew: We got so comfortable doing it, and Chile has like not as good food as Argentina, in my opinion, so we’d go and spend the day eating food that wasn’t as good but experiencing something different. We got so comfortable in Argentina we finally forgot and we said, “It’s such a joke. No one really cares that you leave.” And we got a penalty because apparently they do care that you leave. They do want you to follow the rule even though it seems silly.

Diego: Yeah.

Andrew: All right. You did it. You built this big business. I’m imagining you’re back in San Francisco today because you’re raising more money, true?

Diego: No. Not at the moment. At the moment, we’re focused on launching new products and on getting partnerships to go to market faster and so forth.

Andrew: Okay. All right. But the big vision is we’re going to get to multi-billion dollar valuation, am I right?

Diego: It’s not about the valuation. It’s about hopefully we can build a company that sells–that touches the life of a lot of people, selling a lot of products, helping millions of people travel the world. If that happens, consequently, it’s going to be a big company, a successful company.

Andrew: Yeah. It’s got a lot of buzz from people who really are very hyper-critical. That’s the thing about hardware. I think we’ll accept a bug. There’s this journaling app that I use that now crashes multiple years into its development. Five years in, it crashed yesterday. I accept it. But when you have hardware, if a little seam is off, people will look at it like they are suddenly Jony Ive.

Diego: It’s true. And the thing about hardware versus software is that bugs are really much hardware to fix because sometimes it’s a bug that you need to send an update over the air, sometime it’s an electronics bug and then good luck with that. That’s more difficult to fix. Whereas in software, you just go fix on the air.

Andrew: Any advice for finding a good factory in China?

Diego: I think it’s important to talk to other American companies that work with them. You need to ask them for references and they’ll put you in touch and see how is the experience of working with them. I think that going to one of the really big ones at the beginning is not a good idea because you are a very small client and they’re not going to pay attention to you. Going to a very small one is not a very good idea either because they might not be prepared to make thousands of products. You need to go to a midsize factory that loves your product, loves your project and is going to support you.

Andrew: I have found from doing these interviews that talking to other entrepreneurs who built products similar to yours in the place you want to build it is very helpful.

Diego: Absolutely.

Andrew: Even if all they do is they turn you away from the wrong ones, it seems to help.

Diego: Exactly.

Andrew: But often they’ll help you find the right ones.

Diego: Yeah.

Andrew: Okay. Before I close this out, let me tell people about a tool that’s helped me dramatically on Mixergy. You know search has really been an issue for us because we have over a thousand interviews. I started out using the built in WordPress search. It wasn’t so great. Then I moved on to–sorry WordPress, but actually, sorry to the audience, saying it’s not so great is really an understatement. I was trying to be nice to WordPress. It sucked.

So then I went to Google search. Global pretty much gave up on site search. They have no interest on being a part of our site, really. So their software sucked. Then someone turned me on to Swiftype, also a Y Combinator-backed company. We plugged it into our site. It just worked beautifully and now our developers have constantly built on it. I even hired someone from Toptal. He kept adding code to Swiftype because I said we’re not getting rid of Swiftype. You could be the biggest genius on the planet, you’re not going to beat Swiftype, so code with it and make our search better.

So I want to say thank you to the founder of Swiftype. I’ve had him on here at Swiftype. He’s been nice to me, and I want to share that Swiftype is a great product since we’ve talked about tools. I want to talk about that here.

I’ll close it out by saying we hired from Toptal. Our members have hired from Toptal. Our interviewees have hired from Toptal. If you need a great developer, team of developers, go check out Toptal.com/Mixergy. And if you want to get on the phone with your customers or potential customers, I am telling you–I’ve been talking about it for years–you’ve got to try Acuity Scheduling. It will help close more sales, help you understand your customers better like no other software out there and it will integrate into your site to the point where they won’t even know they’re on a different piece of software. Go check out AcuityScheduling.com/Mixergy.

Finally, I intentionally did not ask Diego to show his luggage here because I think what he did was stunningly beautiful. Frankly, if Jony Ive were to design a piece of luggage, I believe this is what he would design. I don’t think Skype is going to do it justice.

I’m going to urge you if you’re curious about what we’ve been talking about, the last thing I’ll suggest is go to Bluesmart.com and take a look at it. Everyone is going to look at all the design of the hardware and I get it, to see that you can charge, you can locate, etc. I say look at the wheels. I say look at that little thing that who the hell gives a rat’s ass about, wheels, and look at what they did with the wheels.

All right. Thank you so much for being here.

Diego: Thank you very much, Andrew.

Andrew: You bet. It’s an honor to have you on here. Congratulations on your success. I hope you come back here as the company grows and do another interview.

Diego: Absolutely. Thank you very much and keep it up. I learned a lot from you and got inspired by you, so keep it up.

Andrew: I appreciate it. Thank you. Thank you all for being a part of Mixergy. Go build something great and come back here and let me interview you too. Bye, everyone.

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